Klabin

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STRATEGY AND ANALYSIS

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STRATEGY AND ANALYSIS
G4-1 Message from the Administration

ORGANIZATIONAL PROFILE

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ORGANIZATIONAL PROFILE
G4-3 Klabin
G4-4 Klabin – Our company
G4-5 Klabin – Where we are
G4-6 Klabin – Our company, Klabin – Where we are
G4-7 Klabin – Our company
G4-8 Klabin – Our company, Klabin – Where we are
G4-9 Klabin – Our company, Klabin – Where we are, Excellence – Competitiveness and economic results
G4-10 Excellence – Health and safety of direct and indirect employees. Performance of the 2 previous years in relation to information on gender (total number of employees) can be found at http://rs2014.klabin.com.br
G4-11 Excellence – Health and safety of direct and indirect employees
G4-12 Excellence – Wood supply. Information not collected for this cycle is related to:
- main elements of the supply chain in relation to main activities;
- sequence of activities or parties that provide services to the organization. For the aspect Wood Supply, we consider partner producers and wood suppliers;
- sector-specific characteristics of the supply chain.
All other information is controlled.
G4-13 About this publication – Significant changes during the period covered in this report, Klabin – Our company, Excellence – Competitiveness and economic results, Excellence – Wood supply
G4-14 Sustainability - Environment
G4-15 Excellence - Certifications
G4-16 Klabin – Sector participation

IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

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IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES
G4-17 About this publication – How the report is organized
G4-18 About this publication – Materiality
G4-19 About this publication – Materiality
G4-20 About this publication – Materiality
G4-21 About this publication – Materiality. Among the stakeholder groups listed for the definition of material aspects outside the organization, telephone interviews were conducted with five external specialists in the industry or in the area of sustainability; online questionnaire, with 960 responses from Klabin employees, 125 responses from clients, 115 from suppliers, 9 from investors and 18 from other audiences; field visits in Telêmaco Borba and Ortigueira, in Paraná (conversations with Klabin's employees and eight interviews with community leaders, beekeepers, partner producers, and representatives of local government); in Otacílio Costa, Correia Pinto, and Lages, in Santa Catarina (11 interviews with community leaders, partner producers, and representatives of local institutions and public authorities); and in Goiana, in Pernambuco (4 interviews with service provider, community leader, and representatives of the local press and public authorities).
G4-22 The materiality process of the Puma Project was developed based on a territorial analysis during the project design, serving to the report and for the development of these results to be in the current strategic planning of Sustainability.
G4-23 Any significant changes in relation to previous periods are indicated in the indicators themselves.

STAKEHOLDER ENGAGEMENT

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STAKEHOLDER ENGAGEMENT
G4-24 About this publication – Materiality
G4-25 About this publication – Materiality
G4-26 Consultation with stakeholders in the materiality process was carried out in 2014 and is still considered current. Verify the aspects according to stakeholders in the previous report, available at: http://rs.klabin.com.br/pt/relatar.
G4-27 About this publication – Materiality. There is a Stakeholder Engagement policy that defines the methodology and forms of engagement with each audience. The aspects were defined internally, together with the Sustainability Committee; and externally, through interviews with specialists.

GOVERNANCE

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GOVERNANCE
G4-34 Klabin – Our company, Klabin – Executive Board and Board of Directors

ETHICS AND INTEGRITY

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ETHICS AND INTEGRITY
G4-56 Excellence – Wood supply

ECONOMIC

MANAGEMENT APPROACH AND INDICATORS PAGE OMISSIONS REASONS FOR OMISSIONS
CATEGORY: ECONOMIC
MATERIAL ASPECT: ECONOMIC DEVELOPMENT
G4-DMA Excellence – Competitiveness and economic results Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-EC1 Excellence – Competitiveness and economic results
G4-EC2 Sustainability - Environment
G4-EC3 Excellence – Health and safety of direct and indirect employees
G4-EC4 Excellence – Competitiveness and economic results
MATERIAL ASPECT: MARKET PRESENCE
G4-DMA Excellence – Health and safety of direct and indirect employees Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-EC5 Excellence – Health and safety of direct and indirect employees
G4-EC6 Excellence – Health and safety of direct and indirect employees Klabin hires senior management positions locally; however, there is no control/monitoring of the percentage of these employees.
MATERIAL ASPECT: INDIRECT ECONOMIC IMPACTS
G4-DMA Sustainability - Promoting local development Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-EC7 Sustainability - Promoting local development
G4-EC8 Sustainability - Promoting local development
MATERIAL ASPECT: PROCUREMENT PRACTICES
G4-DMA Excellence – Wood supply Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-EC9 Excellence – Wood supply

ENVIRONMENTAL

MANAGEMENT APPROACH AND INDICATORS PAGE OMISSIONS REASONS FOR OMISSIONS
CATEGORY: ENVIRONMENTAL
NON-MATERIAL ASPECT: MATERIALS
G4-DMA Management approach of the aspect not reported given that it is not considered material.
G4-EN1 Sustainability - Environment
MATERIAL ASPECT: ENERGY
G4-DMA Sustainability - Environment Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-EN5 Sustainability - Environment
G4-EN6 Sustainability - Environment
MATERIAL ASPECT: WATER
G4-DMA Sustainability - Environment Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-EN8 Sustainability - Environment
G4-EN9 Sustainability - Environment
G4-EN10 Sustainability - Environment
MATERIAL ASPECT: BIODIVERSITY
G4-DMA Sustainability - Environment Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-EN11 Sustainability - Environment
G4-EN13 Sustainability - Environment
G4-EN14 Sustainability - Environment
NON-MATERIAL ASPECT: EMISSIONS
G4-DMA Sustainability - Environment
G4-EN15 Sustainability - Environment. Gases included in the calculation are CO2, CH4, N2O, HFC, TFC, SF6 and NF3
G4-EN16 Sustainability - Environment. Gases included in the calculation are CO2, CH4, N2O, HFC, TFC, SF6 and NF3
G4-EN17 Sustainability - Environment. Gases included in the calculation are CO2, CH4, N2O, HFC, TFC, SF6 and NF3
G4-EN18 Sustainability - Environment. Gases included in the calculation are CO2, CH4, N2O, HFC, TFC, SF6 and NF3
G4-EN19 Sustainability - Environment
G4-EN21 Sustainability - Environment. The calculation involves only the Paper business units due to the methodology of the goal established, which correlates emissions to tons of paper produced: 210 kg CO2eq/t of paper (Klabin S.A.)
MATERIAL ASPECT: EFFLUENTS AND WASTE
G4-DMA Sustainability - Environment Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential. For the next cycle, data on effluents controlled in the Environmental Portal will be further detailed.
G4-EN22 Sustainability - Environment
G4-EN23 Sustainability - Environment
NON-MATERIAL ASPECT: COMPLIANCE
G4-DMA Management approach of the aspect not reported given that it is not considered material.
G4-EN29 Sustainability - Environment
NON-MATERIAL ASPECT: TRANSPORT
G4-DMA The indicators EN33, EN34, SO10, and SO11 reported address the aspect and the indicator may be taken into account for a next revision of the materiality process
NON-MATERIAL ASPECT: OVERALL
G4-DMA Management approach of the aspect not reported given that it is not material.  After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspect. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential
G4-EN31 Sustainability - Environment
MATERIAL ASPECT: SUPPLIER ENVIRONMENTAL ASSESSMENT
G4-DMA Excellence – Wood supply. Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
Klabin has a criticality matrix for supplier assessment based on several criteria, including sustainability issues. In 2016, the goal of the area is to deepen and strengthen the analysis of suppliers, checking the evidence which are basis for the criticality matrix, and conduct audits at suppliers. We will consider this aspect in the next materiality review.
G4-EN32 Excellence – Wood supply
G4-EN33 Excellence – Wood supply Klabin does not control the percentage of suppliers identified as causing adverse environmental impacts.
MATERIAL ASPECT: ENVIRONMENTAL GRIEVANCE MECHANISMS RELATED TO ENVIRONMENTAL IMPACTS
G4-DMA Sustainability - Environment Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-EN34 Sustainability - Environment

SOCIAL

MANAGEMENT APPROACH AND INDICATORS PAGE OMISSIONS REASONS FOR OMISSIONS
CATEGORY: SOCIAL
SUBCATEGORY: LABOR PRACTICES AND DECENT WORK
MATERIAL ASPECT: OCCUPATIONAL HEALTH AND SAFETY
G4-DMA Excellence – Health and safety of direct and indirect employees. Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
Klabin conducted a workshop on safety (Challenges on Safety Management ) with all Directors who have operations and some managers to understand the opportunities for improvement in relation to safety excellence at Klabin. In 2016, this group will meet to develop a Master Plan for OHS with the aid of external consulting.
G4-LA5 Excellence – Health and safety of direct and indirect employees
G4-LA6 Excellence – Health and safety of direct and indirect employees
ASPECTO NÃO MATERIAL: TRAINING AND EDUCATION
G4-DMA Excellence – Health and safety of direct and indirect employees
G4-LA9 Excellence – Health and safety of direct and indirect employees
NON-MATERIAL ASPECT: DIVERSITY AND EQUAL OPPORTUNITY
G4-DMA Excellence – Health and safety of direct and indirect employees. In 2016, Klabin signed a Conduct Adjustment Commitment (TAC in the Brazilian acronym) with the Government Attorney's Office for hiring people with disabilities in all operating units. The action plans for hiring will be conducted for each industrial plant, beginning with a joint effort in the community of the region of Telêmaco Borba to register people with disabilities; and with partnerships for the systematic implementation of actions.
G4-LA12 Excellence – Health and safety of direct and indirect employees
MATERIAL ASPECT: SUPPLIER ASSESSMENT FOR LABOR PRACTICES
G4-DMA Excellence – Wood supply.Klabin has a criticality matrix for supplier assessment based on several criteria, including sustainability issues. In 2016, the goal of the area is to deepen and strengthen the analysis of suppliers, checking the evidence which are basis for the criticality matrix, as well as conduct audits at suppliers. Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-LA14 Excellence – Wood supply
G4-LA15 Excellence – Wood supply  Klabin does not control the number of suppliers identified as causing significant adverse impacts on labor practices in the value chain.
MATERIAL ASPECT: LABOR PRACTICES GRIEVANCE MECHANISMS
G4-LA16 Sustainability - Environment
SUBCATEGORY: HUMAN RIGHTS
MATERIAL ASPECT: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
G4-DMA Excellence – Wood supply Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
Impacts that lead an aspect to become material and consultations carried out are published in the first publication of the materiality process, available at http://rs2014.klabin.com.br
G4-HR4 Excellence – Wood supply
MATERIAL ASPECT: CHILD LABOR
G4-DMA Excellence – Wood supply Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
Impacts that lead an aspect to become material and consultations carried out are published in the first publication of the materiality process, available at http://rs2014.klabin.com.br
G4-HR5 Excellence – Wood supply
MATERIAL ASPECT: FORCED OR COMPULSORY LABOR
G4-DMA Excellence – Wood supply Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
Impacts that lead an aspect to become material and consultations carried out are published in the first publication of the materiality process, available at http://rs2014.klabin.com.br
G4-HR6 Excellence – Wood supply
NON-MATERIAL ASPECT: INDIGENOUS RIGHTS
G4-DMA Sustainability - Promoting local development
G4-HR8 Sustainability - Promoting local development
MATERIAL ASPECT: ASSESSMENT
G4-DMA Sustainability - Promoting local development Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-HR9 Sustainability - Promoting local development
MATERIAL ASPECT: SUPPLIER ASSESSMENT FOR HUMAN RIGHTS
G4-DMA Excellence – Wood supply. Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
Klabin has a criticality matrix for supplier assessment based on several criteria, including sustainability issues. In 2016, the goal of the area is to deepen and strengthen the analysis of suppliers, checking the evidence which are basis for the criticality matrix, as well as conduct audits at suppliers.
G4-HR10 Excellence – Wood supply
G4-HR11 Excellence – Wood supply Klabin does not control the number of suppliers identified as causing actual or potential significant adverse impacts on human rights in the supply chain.
MATERIAL ASPECT: HUMAN RIGHTS GRIEVANCE MECHANISMS
G4-DMA Sustainability - Environment Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-HR12 Sustainability - Environment
SUBCATEGORIA: SOCIETY
MATERIAL ASPECT: LOCAL COMMUNITIES
G4-DMA Sustainability - Promoting local development Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-SO1 Sustainability - Promoting local development
MATERIAL ASPECT: ANTI-CORRUPTION
G4-SO4 Sustainability - Environment
MATERIAL ASPECT: ANTI-COMPETITIVE BEHAVIOR
G4-DMA Vision for the future - Business expansion Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
Impacts that lead an aspect to become material and consultations carried out are published in the first publication of the materiality process, available at http://rs2014.klabin.com.br
G4-SO7 Vision for the future - Business expansion
MATERIAL ASPECT: SUPPLIER ASSESSMENT FOR IMPACTS ON SOCIETY
G4-DMA Excellence – Wood supply. Klabin has no criteria in place related to impact of suppliers on society.
G4-SO9 Excellence – Wood supply. Klabin has no criteria in place related to impact of suppliers on society.
G4-SO10 Excellence – Wood supply
MATERIAL ASPECT: ENVIRONMENTAL GRIEVANCE MECHANISMS RELATED TO IMPACTS ON SOCIETY
G4-DMA Sustainability - Environment Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-SO11 Sustainability - Environment
SUBCATEGORY: PRODUCT RESPONSIBILITY
MATERIAL ASPECT: CUSTOMER HEALTH AND SAFETY
G4-DMA In the previous cycle, this GRI aspect was associated with Research, development and innovation. However, it was understood that the aspect is not related to the materiality of the aspect, which is the pursuit for sustainable processes to add value to the company's business, and not focus on health and safety in the production stages (on which the indicator focuses).
MATERIAL ASPECT: PRODUCT AND SERVICE LABELING
G4-DMA Innovation - Client satisfaction and product quality Objectives and goals related to the material aspect. After defining the Sustainability Vision in 2013, the company formalized its activities in relation to the aspects. Based on this, a Sustainability Strategy aligned to the Materiality process was developed, which defines action plans for this aspect. Performance goals related to management of material aspects are managed independently by the responsible areas and are confidential.
G4-PR5 Innovation - Client satisfaction and product quality
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The year 2015 was fundamental for Klabin to materialize a great dream. We advanced with the building of the new Puma Unit, in Ortigueira, Paraná, on time and according to the pace and investments planed, the largest in our history. We reached the end of 2015 with 95% of the pulp plant concluded and 77% of the financial disbursement realized. Thanks to this performance and the work of all our employees directly and Indirectly involved with the project, we began operation in March 2016, producing the first bale of pulp within both the deadline and the budget.

The Puma Unit is a milestone in our growth cycle. In full operation, it adds 1.5 million tons of pulp per year to our production capacity, distributed between hardwood pulp (from eucalyptus), softwood pulp (from pine), and fluff pulp, an input used in diapers and sanitary napkins.

While we directed our efforts toward realizing the dream of building a new plant that will allow us to double in size and enter markets where we have not yet operated, we also managed to work in an adverse scenario and maintain good business performance throughout the year.

With the quality of our products and efficiency in processes, we expanded our global presence as paper and cardboard exporters. Thus, we closed the year with significant growth in the foreign market, and continued an uninterrupted positive course of operating cash flow, which at the end of 2015 recorded 18 consecutive quarters of growth.

We increased exported volumes by 15%, which accounted for 34% of total sales for the year – a growth of three percentage points over 2014. Our operating cash flow (adjusted Ebitda) reached BRL 1,975 million in 2015 – the best result in company history, 15% higher than the previous year.

Excellence and Vision for the Future, expressed in the results highlighted above, are attributes listed in Klabin's 117 years of history. Just as important is attention to Sustainability as a fundamental aspect to our existence, and the ongoing challenge of assessing and considering social and environmental externalities for decision-making, as demonstrated through our voluntary commitments. One of these is the Global Compact, an international corporate mobilization seeking a more sustainable and inclusive economy, supported by the United Nations (UN). We believe that the good relationship with these groups is useful both for the beneficiaries and for Klabin, and that this compromise and engagement of stakeholders strengthen the company’s long-term strategy in relation to sustainable development. [GRI G4-1]

The past year gave us the satisfaction of seeing our sustainability and environmental preservation improvement initiatives recognized in several ways: over 40% of our areas are dedicated to conserving the native Atlantic Rainforest. We were appointed by the Carbon Disclosure Project (CDP) Latin America as the company with the best practices in Natural Capital Management and we were highlighted in the “Water Management” category of the Exame Sustainability Guide. For the second time, we were listed for our good environmental performance in the Environmental Paper Company Index (EPCI) Report, a biennial initiative of the WWF, and for the third consecutive time, we composed BM&FBOVESPA’s Corporate Sustainability Index portfolio.

We were also chosen by the Valor 1000 yearbook of the Valor Econômico journal, as the 2015 Company of Value, recognition for criteria including corporate governance, social involvement, respect for consumers, and the environment. Our performance was confirmed through a study carried out by the financial information company Economática, which ranked Klabin as the member company of Bovespa with the highest growth in market cap in 2015. This result gains greater importance when considering that last year the value of publicly traded Brazilian companies listed in the São Paulo Stock Exchange dropped to levels equivalent to those of 2009.

It is the attention we give to research, development, and Innovation – the fourth Klabin attribute throughout history - that endorses our achievements, the continuity of our business, and our market leadership. We are certain that substantial, continuous investment in promising technology, innovative production processes, advanced management models, and personnel training is necessary in order to promote the company’s sustainable growth.

In 2015...
We were appointed by
the Carbon Disclosure Project (CDP)
Latin America as the company
with the best practices
in Natural Capital Management.
We composed,
for the third time,
BM&FBOVESPA’s
Corporate Sustainability
Index portfolio.

We are aware that none of our plans would materialize if we did not know how to attract, train, and take care of the right people, those who help us reach our goals. To us, a sustainable organization is also that which is based on people motivated and challenged to do their best. We seek to offer our staff the support and stimulation they need, so that they may build their careers with us.

We owe all of our employees, clients, shareholders, investors, business partners, and suppliers our sincere gratitude for their trust and the work they developed with us in 2015. The beginning of operations of the Puma Unit and the expanded investments and efforts made in recent years now offer, for the near future, new opportunities for growth and common achievements, despite the challenges presented by the current economic scenario. In the coming years, we plan to double in size, enter additional markets, make new investments, and strengthen our research front. We hope to be able to count on everyone during this journey toward building a more innovative and sustainable company. [G4-1]

The Administration

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Klabin Sustainability Report 2015

This is the 17th Sustainability Report published annually by Klabin. In it, we present our audiences - business partners, clients, employees, suppliers, the community, shareholders, and other stakeholders – with the most relevant information about the company's performance in 2015, covering important events in business development, management practices adopted in the period, and a vision of our prospects for the future. In some cases, highlights of the beginning of 2016 are reported because they are considered strategically important to the company. [G4-24, G4-28, G4-29, G4-30]

In order to present the information in this Report, we adopted the Core G4 guidelines of the Global Reporting Initiative (GRI), an organization internationally recognized as the standard of excellence for creating methodologies and indicators for reporting a company’s social, environmental, and economic management. However, some indicators reported here are not related to any GRI aspect and were reported for being considered relevant, as they are related to external indices and commitments. [G4-32, G4-33]

Warranty statement Back to top

Assurance Statement

BSD Consulting conducted an independent assurance of the process of preparing the Klabin 2015 Sustainability Report, developed in accordance with GRI G4 (Global Reporting Initiative) guidelines, “Core” option. The assurance process occurred for the sixth consecutive year and aims to provide Klabin’s stakeholders with an independent opinion about: the quality of the report; engagement processes with stakeholders; adherence to AA1000 2008 principles; and the company’s sustainability management.

Independence

We work independently and ensure that no member of BSD holds consulting contracts or other commercial ties with Klabin. BSD Consulting is licensed by AccountAbility as an assurance provider (AA1000 Licensed Assurance Provider), registered under number 000-33.

Our Expertise

BSD Consulting is a company specializing in sustainability. The work was conducted by a team of experienced professionals qualified in external assurance processes.

Klabin and BSD Responsibilities

The preparation of the Sustainability Report as well as the definition of its content is under the responsibility of Klabin. Assurance of the report was the object of the work conducted by BSD.

Scope and Limitations

The scope of our work includes the information contained in the full version of Klabin’s 2015 Sustainability Report, which covers from January 1, 2015 to December 31, 2015. The independent assurance process was conducted in accordance with AA1000 Assurance Standard 2008, Type 1 assurance standard, providing a moderate level of Assurance. The goal of the Assurance Statement is to inform stakeholders of BSD’s findings about the process involving the assessment of the adherence of Klabin’s accountability process to three principles: Inclusion, Materiality, and Responsiveness. Assessment of financial data was not the object of the work of BSD Consulting.

Methodology

Procedures developed during this work and the scope of the AA1000AS assurance process include:

  • Assessment of the content of the 2015 Sustainability Report;
  • Assessment of the engagement and materiality process, focusing on GRI G4 criteria;
  • Understanding the flow of processes to obtain and generate information for the Sustainability Report;
  • Research public information about the industry sector and the company (press, websites, and legal information);
  • Interviews with managers of key areas regarding the relevance of information for the report and sustainability management;
  • Interviews with company leaders;
  • Interview with a local external stakeholder, near the company’s unit in Paraná;
  • Where relevant, verify information about sustainability performance of the company’s governing body;
  • Review evidence of the aspects and indicators selected for assurance;
  • Analyze evidence of the stakeholder consultation process;
  • Analyze the relevance of information included in the Sustainability Report from an external stakeholders’ standpoint;
  • Based on sample testing, confirm information included in the Sustainability Report with supporting documentation, management reports, internal controls, and official communication.

Main Findings about Compliance with AA1000AS 2008 Principles

1. Inclusion – covers stakeholder participation in developing a transparent and strategic sustainability management process.

  • In 2015, a new department for Sustainability management was created, along with the areas of Strategic Planning, Sales, and Communication. Klabin has in place a Sustainability Committee and Commission, with the participation of the director, thereby allowing for its governance model to expand the dissemination of issues included under this topic in the coming years, both an internal and external point of view.
  • The annual meeting of the Sustainability Committee, with all leaders represented, did not occur in the 2015 cycle. There were organizational changes in some of the company's departments; therefore, the sustainability team separately presented the materiality results from the previous year, as well as strategic sustainability goals. Specific meetings were held with: a member of the Board of Directors, the CEO, and directors. The strategic sustainability goals defined in 2015 will be presented to all directors at a formal meeting in the next period.
  • In 2015, the Climate Committee was created, focusing on assessing the impact of climate on two fronts: economic impacts on production and the perpetuity of the company, and the environmental contribution the company’s activities may make. The Committee is composed of seven areas of the company, but only Communication, Sustainability, Finance, and Investor Relations attended the first meeting. Climate change is a relevant aspect for Klabin and the paper and pulp industry, and the company has developed initiatives over the years in order to understand the impact of the aspect on the perpetuity of the business. It is important to ensure the involvement of different areas in this committee, providing a broader view of the company’s risks and opportunities associated with the aspect.
  • In 2015, Local Community Forums were implemented in the municipalities of Otacílio Costa and Correia Pinto, in Santa Catarina. The goal of Klabin is to support the empowerment of local stakeholders, focusing on dialogue about opportunities for improvement in their municipalities and defining action plans with ‘multi-stakeholder’ involvement. Nearly 40 people attended the first two meetings, representing various stakeholders, such as: NGOs, neighborhood associations, educational institutions, public authorities, among others. In 2016, further meetings will be held to define goals and action plans. It is important to maintain and expand the initiative, in order to strengthen local community relations and the autonomy of stakeholders in making decisions related to the municipalities where the company operates.
  • The area of communication and sustainability of the Puma Project was expanded in 2015. New management was established at Klabin, called “Community Relations”, which covers Klabin’s total area of operation in the state of Paraná. The purpose of this new area is to ensure a good relationship between the company and stakeholders in the region, and to maintain and strengthen social and community programs developed as consideration projects throughout the previous cycle.
  • Due to the Environmental Impact Study (EIS) of the Puma project, Klabin developed a Basic Environmental Project (PBA in the Brazilian Acronym) that seeks to mitigate and offset its impact by implementing projects and social and environmental programs. One example is the Planning Sustainable Properties project, which focuses on environmental recovery and conservation, as well as the social and economic autonomy of local communities, retaining the rural population in the region. In 2015, environmental planning was carried out for 160 properties in the municipalities of Imbaú and Lajeado Bonito. In 2016, Klabin will purchase local family farming products for the Klabin cafeteria in Ortigueira.

2. Materiality (or Relevance) – important topics for stakeholders to form opinions about the organization’s economic, social, and environmental performance.

  • Using the materiality matrix, in 2015 the Sustainability Commission defined Klabin’s sustainability strategy, strategic goals and their respective indicators. Strategic indicators were defined using a process of reviewing all available external and internal indicators being used by the company. The result of this process was presented in 2015 to some directors and a strategy validation meeting will be held with the entire board in the next cycle.
  • The results of the materiality process from the previous cycle were maintained, but the topic “Customer Satisfaction and Product Quality” was also included. The topic was included after internal assessment by the strategic planning and sales department. Along with this aspect, in 2015, the company initiated a customer satisfaction survey, primarily with corrugated paper clients. As a result of the materiality process, the material aspects from the previous cycle were maintained, and the list was complemented with “Product Labeling and Services” associated with the new aspect.
  • Crossing the material aspects with GRI G4 aspects was maintained in 2015. As in the previous year, we recommend a reevaluation of crossing material aspects with GRI G4 aspects, in order to consider the inclusion of the aspects Anti-corruption and Transportation, which is related to the aspect “Expansion” and its impacts. These aspects are significantly relevant to the company's operations and in the context of sustainability for the industry and the country.
  • It is important to carry out an assessment of the impact related to the material aspects identified. Analysis of the impacts and boundaries is a requirement of GRI G4 guidelines for the materiality process (G4-20 and G4-21). This assessment provides the depth and direction of the company’s sustainability management and strategy regarding its stakeholders and business units.

3. Responsiveness – covers the actions taken by the organization to meet stakeholders’ specific demands.

  • In 2015, the company continued using the Strategic Suppliers Matrix. The tool consists of two matrixes for evaluating suppliers: the Business Matrix, which evaluates the supplier’s risks and impacts on Klabin regarding technical, economic, and labor criteria, and the Sustainability Matrix, which addresses environmental and human rights issues and environmental legislation. Matrixes are used as tools for the evaluation and possible exclusion of suppliers; however they were not applied to Puma Project suppliers. Note the importance of improving and extending the use of the tool, in order to establish environmental and social criteria as part of the supplier selection process.
  • The aspects “Certifications” and “Promoting local development and community relations” were appropriately reported in 2015. The report of actions related to supply chain management and the controlled wood program for suppliers can be highlighted. However, some material aspects, such as “Effluents and Waste” and “Mechanisms for Grievances and Complaints Related to Environmental Impacts”, may be more detailed and enhanced in the report. In 2015, a paper machine overflowed at the Goiana unit in Pernambuco, due to a problem during the new machine testing phase. As a result, Klabin invested to prevent further occurrences and notified the environmental agencies about the accident. This fact was not presented in the report, although it was relevant to the company’s operations in the region. Note the importance of reporting effluent management, including important events in the context of sustainability of this aspect, as well as the form of management used to mitigate this type of occurrence.
  • The controls related to the G4-LA6 indicator (types and rates of injury, occupational illness, lost days, absenteeism, and number of work-related fatalities, broken down by region and gender) are standardized regarding information about the company’s own employees and contractors, except controls regarding the rate of occupational illness, which could not be validated in this cycle. The accident frequency rate is a significant indicator for the company, and it increased during the period of 2015 for the company’s own employees. Forms of Health and Safety management for Puma project workers were not presented in the report, despite having used the same Klabin corporate management tools. There is opportunity to improve Health and Safety programs in order to enhance the company’s accident prevention culture, reduce the accident frequency rate, as well as the severity of occurrences.
  • Monitoring environmental indicators for Water, Energy, Waste, and Effluents is carried out monthly at all units through the Environment Portal. The controls for the G4-EN22 indicator (total disposal of water, broken down by quality and destination) are standardized, the heads of each unit have monthly controls, and information is reviewed through a critical analysis by the corporate Environmental area. Note the importance of improving the flow of information and forms of internal control regarding indicators for Effluents and Waste and promoting alignment of all units, ensuring reliable information, improvement in the consolidation of the indicators, as well as achievement of goals and compliance with applicable legal standards.
  • The controls related to the G4-EC9 indicator - ratio of spending on local suppliers at significant operating units - are standardized. The Procurement area manages all suppliers registered with Klabin; however the system does not indicate the company’s local suppliers. This information is designed only for the sustainability report, with the use of suppliers' registration data. In addition, information about local suppliers by state, complementary to the indicator requirements, was not submitted for validation.
  • Indicators regarding supplier management G4-HR10 (Percentage of new suppliers selected based on human rights criteria), G4 LA14 (Percentage of new suppliers selected based on labor practices criteria), and G4-EN32 (percentage of new suppliers that were evaluated using environmental criteria) are not standardized. The information about the suppliers evaluated in sustainability and business matrixes are systematized, but there are no specific controls to measure the number of new suppliers selected and evaluated based on sustainability criteria established in the Strategic Suppliers Matrix.
  • Klabin has a corporate grievances channel, managed by an Ombudsman’s office, plus local channels at forestry units (São Paulo, Paraná, and Santa Catarina) to receive statements from internal and external stakeholders. The following controls of indicators could be improved: G4-EN34 (number of grievances and complaints about environmental impacts filed, addressed and resolved through formal grievance mechanisms), G4-HR12 (number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms.), and G4-SO11 (number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms). Management of formal grievance mechanisms is not standardized and consolidated, and is carried out by two areas in different units. It is important to clearly identify which units are served by the available grievance channels and ensure alignment between the different channels available to record and control statements received, through clear and standardized procedures.

Final Considerations

We highlight Klabin’s efforts in the sustainability reporting process, using the GRI G4 guidelines, applying the Core option. From BSD Consulting’s standpoint, Klabin is structuring its sustainability management through engagement practices with stakeholders and local development in the areas of impact of its units in Paraná, and has been strengthening its sustainability governance model, through the Sustainability Committee and Commission as well as the creation of a Climate Committee. Note the importance of improving adherence to the GRI G4 guidelines and further detailing of relevant aspects, through a process of evaluating boundaries and impacts, as well as reporting goals related to the material aspects of the report. The 2015 Sustainability Report shows Klabin’s commitments through its sustainability management model, and there is opportunity to expand the vision on risks and impacts on sustainability, in order to contribute to a more transparent report with balanced information.

São Paulo, May 23, 2016.

BSD Consulting - Brasil

BSD Consulting - Brasil

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How the Report is organized

This Report is divided into four main sections: Excellence, Sustainability, Innovation, and Vision for the Future. We believe that these aspects correspond to the four attributes that have defined the organization over its 117-year history.

Excellence
Innovation
Sustainability
Vision for the Future

In each section, matters relating to the nine material aspects addressed in the Materiality Matrix are also highlighted. They are considered the most relevant aspects of Klabin’s activities, determined through consultation with the company's main stakeholders. Specific icons for each material aspect identify when they appear in each section.

Financial indicators listed refer to all of Klabin’s operating units in Brazil and Argentina. Social and environmental information includes only the operations on Brazilian territory. [G4-17]

The financial statements, audited by PriceWaterhouseCoopers, follow Brazilian standards and International Financial Reporting Standards (IFRS), as determined by instructions 457/07 and 485/10 of the Brazilian Securities Commission (CVM). Any revisions of data published in previous years are marked and clarified in the body of the Report. The information contained in this publication was submitted for assurance of the independent auditors of BSD Consulting. [G4-33]

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Significant changes during the period covered in this report [G4-13]

As for Klabin operations, in February 2015 we started operating a machine for 110,000 tons of recycled material at the unit in Goiana, PE, as well as debottlenecking at the units in Piracicaba and Angatuba, SP. In addition, throughout the year, the Puma Project construction advanced as planned, and in March 2016, the new unit produced its first bale of pulp. Regarding changes in the shareholding structure, the most relevant may be verified in item 18 of the 2015 financial statements, as shown in the table below:

Net equity

Social capital

The social capital of Klabin S.A., subscribed and paid in on December 31, 2015, is divided into 4,732,629,090 shares (4,729,789,565 on December 31, 2014), without nominal value, corresponding to BRL 2,383,104 on December 31, 2015 (BRL 2,271,500 on December 31, 2014), distributed as follows:

Shareholders 12/31/2015 12/31/2014
Common shares Preferred shares Common shares Preferred shares
BndESPAR 49.425.928 197.703.712 65.960.320 263.841.280
The Bank of New York Department 57.891.204 231.564.816 55.552.238 222.208.952
Capital World Investors 63.474.000 253.896.000 - -
Monteiro Aranha S/A 70.290.789 281.163.156 65.965.831 263.863.324
Klabin Irmãos e Cia 941.837.080 - 941.837.080 -
Niblak Participações S/A 142.023.010 - 142.023.010 -
Outros 493.234.594 1.795.207.301 547.153.721 2.010.883.809
Ações em Tesouraria 30.983.500 123.934.000 30.100.000 120.400.000
  1.849.160.105 2.883.468.985 1.848.592.200 2.881.197.365

In addition to the registered common and preferred shares, the company negotiates share deposit certificates, referred to as "Units", corresponding to the lot of 1 (one) common share - ON and 4 (four) preferred shares - PN.

The company's authorized capital is 5,600,000,000 registered common shares - ON and/or registered preferred shares - PN approved at an Extraordinary General Assembly on March 20, 2014.

This report is available in the following versions:

Comments, criticisms or suggestions regarding this document should be sent to the email address rs@klabin.com.br. [GRI G4-31]

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Materiality

Material Aspects

Competitiveness and economic results Competitiveness and economic results
Environment Environment
Wood supply
Promotion of local development and community relations Promotion of local development and community relations
Business expansion Business expansion
Health and safety of direct and Indirect employees Health and safety of direct and Indirect employees
Research, development, and innovation Pesquisa, desenvolvimento e inovação
Certifications Certifications
Client satisfaction and product quality Client satisfaction and product quality

The Materiality Matrix was developed with the assistance of an external consulting company and involved six phases:

1 identification of relevant aspects, based on the evaluation of documents, research and internal and external reports
2 identification and prioritization of strategic audiences by the Sustainability Committee
3 consultations and prioritization of aspects, according to indications of the audiences consulted
4 analysis of results
5 validation of the results by the Sustainability Committee and by Klabin’s senior management, taking into account the alignment of the information collected with the company’s strategy
6 final report, detailing the materiality process and relating the results to the GRI G4 guidelines

The current Materiality, with these aspects identified as relevant to the company's sustainability management in the short, medium, and long term, was developed in 2014 through consultation with several of our audiences. Although the aspect "Client satisfaction and product quality" was initially considered a material aspect, company management decided to postpone its inclusion in the Matrix, to be included in this report, due to the creation of the new Commercial Planning Department. In order to define Materiality, company directors and external specialists were consulted in face-to-face, digital, or telephone interviews; employees, clients, suppliers, investors, and other audiences were consulted through group dynamics and online questionnaires. Community leaders, beekeepers, partner producers, and representatives from local government were also consulted on field visits to the company's units in Paraná, Santa Catarina, and Pernambuco. Throughout this process, over 1,000 responses and/or interactions were recorded. In this work, respondents were asked to choose the ten aspects that they considered most relevant from a list that was presented to them, and then elected the five priorities in order of importance. [G4-18, G4-24, G4-25]

Using the Materiality, we saw the need to define Sustainability indicators related to strategic objectives that would help assess management of material aspects. This work was carried out in 2015, and makes up Klabin’s Sustainability Strategy. Using the results of 23 interviews with managers and employees from business units and corporate areas, and the analysis of internal documents, industry benchmarking, and global references, strategic sustainability objectives were developed for each business unit, forming the basis of Klabin’s Sustainability Strategy.

(Learn more about this strategy in the Sustainability section).

The next Materiality cycle will include other units that have not yet had face-to-face consultations, and will undergo annual revisions and possible updates in order to meet internal and external demands. [G4-24, G4-25]

MATERIAL AND GRI ASPECTS

GRI Material aspect [G4-19, G4-20, G4-21, G4-27] Associated material aspect Material aspect within the organization Material aspect outside the organization
Economic performance Competitiveness and economic results Yes (all operations) Yes (clients, specialists, suppliers, investors, and the media)
Market presence Promotion of local development Yes (all operations) Yes (community, specialists, suppliers, and the government)
Indirect economic impact Promotion of local development Yes (all operations) Yes (community, specialists, suppliers, and the government)
Procurement practices Wood supply Yes (all operations) Yes (suppliers and investors)
Energy Environment Yes (all operations) No
Water Environment Yes (all operations) Yes (specialists)
Biodiversity Environment Yes (all operations) Yes (community and specialists)
Effluents and waste Environment Yes (all operations) Yes (specialists)
Environmental assessment of suppliers Certifications Yes (all operations) Yes (clients, suppliers, and the media)
Mechanisms for grievances and complaints regarding environmental impacts Promotion of local development Yes (all operations) Yes (community, specialists, suppliers, and the government)
Occupational health and safety Health and safety of direct and Indirect employees Yes (all operations) Yes (clients and suppliers)
Assessment of labor practices of suppliers Certifications Yes (all operations) Yes (clients, suppliers, and the media)
Freedom of association and collective bargaining Certifications Yes (all operations) Yes (clients, suppliers, and the media)
Child labor Certifications Yes (all operations) Yes (clients, suppliers, and the media)
Forced or compulsory labor Certifications Yes (all operations) Yes (clients, suppliers, and the media)
Assessment Certifications Yes (all operations) Yes (clients, suppliers, and the media)
Assessment of human rights practices of suppliers Certifications Yes (all operations) Yes (clients, suppliers, and the media)
Mechanisms for grievances and complaints regarding human rights Certifications Yes (all operations) Yes (clients, suppliers, and the media)
Local communities Promotion of local development Yes (all operations) Yes (community, specialists, suppliers, and the government)
Unfair competition Business expansion Yes (all operations) Yes (clients, specialists, and the media)
Assessing supplier impact on society Certifications Yes (all operations) Yes (clients, suppliers, and the media)
Mechanisms for grievances and complaints regarding impact on society Promotion of local development Yes (all operations) Yes (community, specialists, suppliers, and the government)
Labeling products and services Client satisfaction and product quality Yes (all operations) Yes (clients and suppliers)
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Our company

We are a publicly traded corporation that offers the markets in Brazil and around the world a broad portfolio of products, including wood logs, pulp, paper and cardboard for packaging, corrugated boxes, and industrial bags. Our supply chains are integrated: we plant pine and eucalyptus forests that provide wood to produce the pulp that is used to manufacture our paper and packaging or sold to clients abroad. Attention to our production areas extends to the native forests, and over 40% of our forest area is aimed toward preserving their unique wildlife and flora and conserving water resources. [G4-4, G4-7, G4-8]

With 117 years of history, we are the largest producer and exporter of packaging paper in Brazil and leaders in every market segment in which we operate in the country. In 2016, since we began operating the Puma Unit, Klabin began marketing hardwood pulp, softwood pulp, and fluff pulp produced at one plant entirely designed for these purposes. More than a pulp manufacturer, the company offers fiber solutions that meet all client needs, giving them the opportunity to focus their business on a single company, which simplifies the purchasing process and reduces the exchange rate risk. [G4-13]

We built an organization dedicated...

... to promoting the sustainability of its operations. We pioneered the protection of native forests and responsible forest management techniques regarding the environment; we were the first company in the sector in the Southern Hemisphere to receive FSC® certification (FSC- C022516) - Forest Stewardship Council®. And this pioneering continues: in 2015, Klabin became the first company to be recognized by the Carbon Disclosure Project Latin America (CDP) for adopting best practices in management of natural capital.

(read more in the Sustainability Section).

We are convinced that respect for the environment and socially responsible management practices are essential to integrated and sustainable growth, and that the results of these actions must be shared with our employees, business partners, and neighboring communities.

We believe in innovation...

... To Klabin, doing research, developing new products, and exploring new business are inherent aspects of the path of a company that is perennial in nature. In 2015, we began our largest investment in innovation in our history. By 2018, a total of BRL 70 million of investments will be geared toward activities and infrastructure for Research, Development, and Innovation (R&D+I). A large part of these resources are focused on creating a new Technology Center, under construction at the Monte Alegre Unit, in the city of Ortigueira, PR, which should be completed by the last quarter of 2016.

More on the Puma Unit in the Vision for the Future section

In addition, partnerships with research institutes, acquisition of equipment, and personnel training are planned.

Innovation and technology are also the best allies when it comes to moderating our environmental footprint. We reasonably use resources such as water and reduce the waste generated by our industrial operations. We know that all economic activity causes impact on the environment and neighboring communities, which is why we handle these impacts in a transparent and responsible manner, with the intention of promoting local development.

To achieve these goals and enable new action in the future, Klabin is committed to best global sustainability practices, combining high forest productivity, low operating cost, efficient logistics, and the latest environmental technology. A fundamental step on this path was beginning operation of the Puma Unit, in Ortigueira, Paraná, in March 2016.

The new unit will double Klabin’s production capacity. This was a BRL 8.5 billion investment (including infrastructure, taxes, and contract restatements) – the largest private investment in the history of the state of Paraná – with the ability to leverage our operations in the domestic and foreign markets. These are some of the challenges that lie ahead for the second half of the ten-year growth cycle that began in 2011. Our 16,000 employees are ready to face them. [G4-9]

Sustainability Governance [G4-34]

In 2015, we strengthened our processes of understanding sustainability challenges by creating the Klabin Climate Committee. It is a multidisciplinary working group responsible for following the progress of studies on global climate change, in order to estimate how much our business may become vulnerable given the troubling changes taking place.

Our governance structure for sustainability is built upon three pillars:

  • a Sustainability Committee at the level of the Executive Board and the Board of Directors, which ensures attention to the aspect in the company’s strategic decision making;
  • a Sustainability Commission, an executive group that works with projects related to the subject, with the presence of representatives from various areas such as Supply Chain, Personnel & Management, Environment, Forestry Sustainability, Investor Relations, Strategic Planning, and Research, Development, and Innovation, as well as representatives from the business units;
  • Sustainability and Communication Management Department, responsible for implementing policies related to the aspect, in order to ensure the best operational practices, with respect for human rights, compliance with ethical and legal criteria, community and employee development, and the reasonable use of natural resources.
Our business units [G4-8]
  • Forestry Business Unit

    Responsible for managing forests planted by Klabin, which includes planning, planting, and harvesting in order to supply raw material to our paper and pulp plants.

  • Pulp Business Unit

    Produces hardwood pulp (eucalyptus), softwood pulp (pine), and fluff pulp. Manufactured for the first time in Brazil from softwood, fluff pulp is an important input for producing disposable diapers and sanitary napkins, as well as other products.

  • Paper Business Unit

    Produces cardstock for liquids and for the food, hygiene, cleaning, and electronics industries, among others. Always using the latest technology, manufactures kraft paper used in corrugated boxes, industrial bags, and produces recycled paper.

  • Conversion Business Unit

    Converts kraftliner and sack kraft paper into corrugated cardboard and industrial bags, used by the food, beverage, fresh produce, health, personal care, electronics, and civil construction sectors.

Our operation [G4-6, G4-8, G4-9]

Klabin is a leader in Brazil in the following markets:
  • Paper and cardboard for packaging Paper and cardboard for packaging
  • Corrugated boxes Corrugated boxes
  • Industrial bags Industrial bags
  • Wood in logs for sawmills and plywood plants Wood in logs for sawmills and plywood plants

The only...

  • ...supplier of cardboard for liquids in Latin America
  • ...producer of large scale fluff pulp in Brazil
  • ...company in the country to simultaneously supply softwood pulp, hardwood pulp, and fluff pulp from a plant designed for this purpose: the Puma Unit.
Nearly 16,000 direct and Indirect employees Nearly 16,000 direct and Indirect employees

Our clients

The following industries:

  • Food (milk, refrigerated meat, and fruit)
  • Health and personal care
  • Hygiene and cleaning
  • Civil construction
  • Electronics
Our land:
  • 489,000 hectares of
    own land*
    (area in December 2015)

*The 44,000 hectare difference from the total sum includes infrastructure areas (roads and betterment, for example), and areas without planting.

  • 235,000 hectares of planted forests 235,000 hectares of planted forests
  • 210,000 hectares of preserved native forests 210,000 hectares of preserved native forests

In 2015, a total of 10,000 hectares of own and third-party lands were planted; third-party lands planted through the partnership program.

Where we are

Klabin has administrative headquarters in São Paulo. We cultivate forests in three Brazilian states and currently maintain 16 industrial units, 15 of which are located in Brazil, distributed over seven states, and one in Argentina. We also have sales offices in eight Brazilian states, one branch in the United States, and representatives and sales agents in several countries. [G4-5, G4-6, G4-9]

  • Forestry
    • Alto Paranapanema (SP)
    • Alto Vale do Itajaí (SC)
    • Campos Gerais (PR)
    • Planalto Catarinense (SC)
    • Planalto Guarapuava (PR)
    • Vale do Corisco (PR)
  • Hardwood pulp
    Softwood pulp
    Fluff pulp
    • Ortigueira (PR)
  • Packaging papers
    • Angatuba (SP)
    • Correia Pinto (SC)
    • Otacílio Costa (SC)
    • Telêmaco Borba (PR)
  • Industrial bags
    • Goiana (PE)
    • Lages (SC)
    • Pilar (Argentina)
  • Recycled papers
    • Goiana (PE)
    • Piracicaba (SP)
  • Corrugated cardboard packaging
    • Goiana (PE)
    • Feira de Santana (BA)
    • Betim (MG)
    • Jundiaí (SP)
    • Piracicaba (SP)
    • Itajaí (SC)
    • São Leopoldo (RS)

Exports

Klabin exports its products to over 60 countries on all continents. [G4-8]

Exports

Executive Board and Board of Directors [G4-34]

Statutory Board

  • Fabio Schvartsman General Director
  • Antonio Sergio Alfano CFO and Investor Relations
  • Francisco César Razzolini Director of Projects and Industrial Technology
  • Arthur Canhisares Industrial Director of Papers
  • Cristiano Teixeira Executive Director of Conversion
  • Eduardo de Toledo Director of Supply Chain

Klabin Argentina

  • Douglas Dalmasi President
  • Julio Alfredo Vieito Vice President
  • Luis Matías Ponferrada Director
  • Hernán Martín Oriolo Alternate Director

Non-Statutory Board

  • Adriano Canela Director of Business Planning
  • Douglas Dalmasi Director of Industrial Bags
  • Edgard Avezum Junior Commercial Director of Cardstock
  • Gabriella Michelucci Director of Corrugated Cardboard
  • José Artêmio Totti Director of Forestry
  • José Soares Commercial Director of Pulp
  • Sergio Piza Director of People & Management
  • Sadi Carlos de Oliveira Industrial Director of Pulp

Investor Relations

  • Antonio Sergio Alfano Director
  • Tiago Brasil Rocha Manager
  • Daniel Rosolen Coordinator

Composition of the Board of Directors*

Effective members Alternate members
Armando Klabin José Klabin
Celso Lafer Reinoldo Poernbacher
Daniel Miguel Klabin Amanda Klabin Tkacz
Paulo Sérgio Coutinho Galvão Filho Graziela Lafer Galvão
Israel Klabin Alberto Klabin
Roberto Klabin Martins Xavier Lilia Klabin Levine
Luis Eduardo Pereira de Carvalho Vivian do Valle Souza Leão Mikui
Pedro Franco Piva Eduardo Lafer Piva
Roberto Luiz Leme Klabin Marcelo Bertini de Rezende Barbosa
Sérgio Francisco Monteiro de Carvalho Guimarães Olavo Egydio Monteiro de Carvalho
Rui Manuel de Medeiros D’Espiney Patrício Joaquim Pedro Monteiro de Carvalho Collor de Mello
Vera Lafer Francisco Lafer Pati
Helio Seibel Matheus Morgan Villares
*Composition of the Board of Directors effective in 2016.
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Sectorial participation [G4-16]
Entity Participation in governance bodies Participation in committees
Associations and unions
Brazilian Tree Industry (IBÁ) Effective member Certification Committee;
Climate Change Committee
Brazilian Corrugated Cardboard Association (ABPO) Vice Presidency Mill Broke Market Group;
Tax Group
Brazilian Technical Pulp and Paper Association (ABTCP) Vice Presidency
Association of SAP Users of Brazil (ASUG Brazil) Coordination Business Intelligence Group
Paper and Pulp Industry Union of Paraná Board (alternate)
Cardboard Industry Union of the State of São Paulo (Sinpesp) Presidency
Union for the Paper, Pulp, and Wood Paste for Paper Industry of the State of São Paulo (SIP/SP) Board of Directors
Paraná Association of Forest-Based Enterprises (Apre) Vice Presidency
São Paulo Association of Planted Forest Producers (Florestar São Paulo) Vice Presidency
Santa Catarina Association of Forestry Enterprises (ACR) Vice Presidency
Research Institutions
National Council for Scientific and Technological Development (CNPq) Center of Technology and Innovation Advisors
Institute for Forestry Research and Studies (IPEF) Board of Directors;
Effective member
Group of forestry companies in partnership with the University of São Paulo (USP);
Cooperative Program for Forest Certification
Other entities
Canoas River Basin Management Committee Advisory Board
Tibagi River Basin Committee Effective member
Corporate Movement for Biodiversity Communication Committee
World Containerboard Organization (WCO) Board of Directors
International Corrugated Case Association (ICCA) Board of Directors
Innventia Research Institute Cluster Fiber Stock and Product Optimization
Central American and Mexico Coniferous Resources Cooperative (Camcore), North Carolina (USA) Scientific Board Member of the pinewood research and studies consortium
Forest Research Society (SIF) Board of Directors Forestry companies in partnership with the Federal University of Viçosa
FSC International Effective member Policy and Standards Committee (PSC)
Forest Dialogue – PR/SC Forum Effective member
Forest Dialogue – SP Forum Coordination Council
National Forest Dialogue Coordination Council
The Forests Dialogue Effective member;
Leader;
Advisory Board
Steering Committee;
Executive Team;
Tree Plantations in Landscape;
Land Use Dialogue
Partnerships in research abroad
Forest Productivity Cooperative (FPC) North Carolina State University;
University of Toronto;
Lund – University of Sweden
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Our commitment to people and businesses

Excellence is expressed in our commitment to our shareholders, the market, our employees, the communities near our units, and the environment. Because of this commitment, we are constantly improving our processes, guided by best global practices in sustainability. Thus, in a disciplined manner, our management combines high forest productivity, low cost, efficient logistics, and environmental technology. We have courage, the ability to achieve our goals, and commitment to sustainable development. In this section, we will address four aspects in our Materiality Matrix that are considered crucial to Klabin’s excellence and the recognition of this attribute in the company and the market:

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Competitiveness and economic results

The year 2015 was challenging, and required persistence, focus, and flexibility in decision making. Several factors combined to create a scenario that affected various industries to a greater or lesser degree. Regarding the economy, there was a reduction in domestic consumption and increased inflation, reflecting on the production costs of companies operating within Brazil. On the other hand, the strong depreciation of the Brazilian real and the less adverse economic conditions in international markets favored exports.

Klabin responded to this situation by increasing the sales of paper and cardstock in the foreign market, a move supported by the quality and competitiveness of our products, and especially, by the flexibility and resilience of our business model. The result was an increase in the volume of exported products and net revenue, allowing for the 18th consecutive quarter of growth in Ebitda.

2015 Highlights [G4-9]

  • Net revenue

    BRL 5,688 million

    In the year 2015, revenue totaled BRL 5,688 million, also 16% above that obtained in 2014.

  • Volume exported

    15% increase

    Sales volume in the foreign market reached 627,000 tons during the year 2015, proving Klabin with flexibility in a weakened Brazilian economy.

  • Adjusted Ebitda

    BRL 2.0 billion

    In 2015, the adjusted Ebitda totaled BRL 1,975 million, which was 15% over 2014.

  • Investments

    BRL 4.6 billion

    With the acceleration of disbursements for the Puma Project, the total investment in 2015 was BRL 4,627 million, of which BRL 4,053 million was for the Puma Project.

  • Puma Project

    95% complete

    By the end of 2015, construction of the new Klabin pulp plant had 95% physical progress and 77% of financial disbursements had been made. The start of operation is scheduled for March 2016.

Complete solution in fibers

The year 2015 was the final stretch of the Puma Project, the largest investment in the history of the company, totaling approximately BRL 8.5 billion, including infrastructure, taxes, and contractual restatements. The new unit produced its first bale of pulp on March 4, 2016, representing one of the greatest achievements in the ten-year growth cycle that began in 2011. With this, Klabin includes in its portfolio the sale of hardwood pulp, softwood pulp, and fluff pulp, pioneering a complete solution in fiber. We are the first company in Brazil to produce fluff pulp from softwood pine, which opens the domestic market to the possibility of ceasing to import this raw material.

Main results in 2015

Direct economic value generated and distributed [G4-EC1]

BRL million 2015 2014 2015/2014
Sales volume (thousand t) 1,833 1,771 3%
Domestic market 1,205 1,227 -2%
Exports 627 545 15%
% Domestic market 66% 69% -3 p.p.
Gross revenue 6,746 5,900 14%
Net revenue 5,688 4,894 16%
Domestic market 3,841 3,679 4%
Exports 1,846 1,215 52%
% Domestic market 68% 75% -7 p.p.
Change in fair value of biological assets 536 924 -42%
Cost of goods sold (3,982) (3,574) 11%
Gross profit 2,242 2,244 0%
Gross margin 39% 46% -7 p.p.
Sales (429) (380) 13%
General & administrative (338) (298) 13%
Other revenue (Expenses) Operational (13) 85 n/a
Total Operating Expenses (780) (593) 31%
Adjusted Ebitda 1,975 1,718 15%
Adjusted Ebitda Margin 34% 35% -1 p.p.
Net profit (1,253) 730 n/a
Net indebtedness 12,411 5,242 137%
Net indebtedness/adjusted Ebitda 3,1x 3,0x

Notes: Some figures in tables and charts may not express an accurate result due to rounding.
The adjusted Ebitda margin is calculated over net pro forma revenue, which includes revenue from Vale do Corisco.

In 2015, Klabin generated over BRL 6 billion in revenue. Economic value was distributed as follows:
2015 % 2014 %
Direct economic value generated (in BRL million)
Gross revenue 6,746 5,900
Economic value distributed (in BRL million)
Operating costs (3,487) -6.31 (3,088) -4.40
Employee salaries and benefits 927 1.68 81 1.17
Payment to suppliers 4,41 7.99 1,27 1.81
Payments to the government (50) -0.09 96 1.38
Shareholders (dividend, interest on own capital, retained earnings) (1,253) -2.27 730 1.04
Total 551 1.00 703 1.00

Operating result

The operating cash flow (adjusted Ebitda) reached BRL 1,975 million in 2015, the best result in the history of the company, and 15% higher than the previous year.

Sales volume (excluding wood) was 1.883 million tons, a 3% gain over 2014. The volume exported during the year, 627,000 tons, represented 34% of total sales, three percentage points higher than the previous year.

Net revenue (including wood) was BRL 5,688 million. The result, 16% higher than that of 2014, reflects Klabin’s mix of products and markets, as well as increased exports with a more favorable exchange rate, particularly in the second half of the year. Revenue from exports was BRL 1,846 million for the year, a 52% increase over 2014.

The unit cash cost*, including general cost of sales and administrative expenses, was BRL 2,048 per ton. Excluding non-recurring effects, the cash cost per unit was BRL 2,041 per ton, 10% higher than that recorded in 2014. This variation mainly reflects increases in electricity, chemical, and fuel prices, which were substantially higher than the official price index. The company's cost reduction efforts and higher sales volume partially absorbed the fixed costs, and partially offset inflation regarding inputs and the higher exchange rate during the period.

The net non-cash effect regarding the fair value of biological assets (variation of fair value of forests less depletion) in Ebitda was a positive BRL 69 million, compared to BRL 310 million in 2014. The change is largely due to smaller increase in the prices used in the 2015 assessment compared to the increase verified in 2014.

Cost of sales in 2015 was BRL 429 million, which was 13% higher than 2014 due to the increase in net revenue and higher volume of exports. Still, the cost of sales during the year represented 7.5% of net revenue, in line with the previous year. General and administrative expenses totaled BRL 338 million in 2015, which was 13% higher than in 2014. These rates were affected by collective wage increases, extraordinary expenses for compensations, and the preparation of teams that will work in the new pulp business.

*All costs directly incurred by the company to produce 1 ton of a product.

Financial result

Consolidated gross indebtedness at the end of the year was BRL 18,022 million, of which BRL 2,084 million (12% of gross debt) is short term. The increase in gross indebtedness in 2015 resulted from contracting long-term debt at competitive costs in order to guarantee the necessary resources to invest in the Puma Project, as well as ensure liquidity during a year marked by major economic instability.

Cash and financial investments on December 31 of 2015 totaled BRL 5,611 million, a stable amount compared to the end of 2014, even with the disbursements made in 2015 to build the new pulp factory. Stability was maintained by contracting financing to fund the Puma Project as well as strong generation of the company's operating cash.

Consolidated net indebtedness totaled BRL 12,411 million, mainly affected by investments in the Puma Project and the impact of the exchange rate variation throughout 2015 on the portion of the debt denominated in U.S. dollars, which accounted for 69% of the total indebtedness at the end of the year. The strong depreciation of the Brazilian real against the U.S. dollar in 2015 affected the net debt / adjusted Ebitda ratio by 1.4 times. In this way, the indicator ended the year of 2015 at 6.3 times, against 3.1 times at the end of 2014.

It is important to note that, in addition to Klabin not having any financial covenant* associated with its debt, the effect of the exchange rate variation is purely accounting and impacts, for the most part, export pre-paid financing not associated with the Puma Project and already backed by Klabin’s future export commitments.

* A covenant is a legal restriction on the issue of bonds, or financing, in which the borrower has its activities restricted and whose purpose is to provide greater surety to lenders.

Net result

Net result was positively influenced, on one hand, by good cash generation in 2015, and on the other hand, by the non-cash impact on debt of the appreciation of the U.S. dollar against the Brazilian real, totaling a loss of BRL 1,253 million for the year, compared with a BRL 730 million positive result in 2014.

Investments [G4-9]

BRL million 2015 2014
Forestry 97 102
Operational continuity 348 282
Special projects 59 74
Expansion 71 245
Puma Project 4,053 2,242
TOTAL 4,628 2,945

In 2015, Klabin invested a total of BRL 4.6 billion, of which BRL 4 billion was allocated to the Puma Project, the largest investment in the company’s history, on which over 12,000 employees worked during most of the period - efforts crowned by the beginning of unit operations in March 2016. Klabin carried out its largest expansion project exactly according to the initial schedule and budget defined.

In addition to the new pulp plant, BRL 348 million were allocated to the continuity of plant operations, BRL 97 million were geared toward forestry operations, and BRL 59 million were invested in special projects and in the completion of the expansion of capacity of paper and cardstock.

At the beginning of 2015, a new recycling machine started operating in Goiana, PE, which added 110,000 tons to Klabin’s annual recycled paper capacity. In addition, renovations to increase the capacity of the Piracicaba, SP plant were concluded, adding 15,000 tons of production to the unit. [G4-13]

Capitals market

In 2015, Klabin Units (KLBN11) had their stock prices increase by 61% against a depreciation of 13% in IBOVESPA. The company's Units were traded in all BM&FBOVESPA trading sessions, recording 1.2 million transactions involving 794 million shares and an average daily trade volume of BRL 63 million at the end of the year.

Klabin’s capital stock is represented by 4,733 million shares, a total of 1,849 million of which are common shares, and 2,884 million are preferred shares. Klabin's shares are also traded in the US market as Level I ADRs (American Depositary Receipts), the shares are listed on the OTC market (over-the-counter), under the code KLBAY.

Advantages for investors

In 2015, Klabin maintained the Investment Grade in category "BBB-" on a global scale by agencies Standard & Poor’s and Fitch Ratings. These institutions recognized – in a year when Brazil lost its sovereign investment grade – the company's high level of liquidity, strong cash position, and suitable indebtedness to carry out the Puma Project, as well as the expected soundness of the business and future results following the completion of the project.

The company continues to integrate the Corporate Sustainability Index (ISE) of the Stock, Commodities, and Futures Exchange of São Paulo (BM&FBOVESPA). The new portfolio, which entered in force on January 4, 2016, joins shares from 35 companies that stand out for their high degree of commitment to the sustainability of businesses and Brazil. This achievement reinforces Klabin's history of commitment to sustainable development, demonstrated by the company’s pioneer work with certifications of the pulp and paper industry and in management of biodiversity.

In 2015, Klabin was also recognized by the Carbon Disclosure Project (CDP), as the company with the Best Practice in Natural Capital Management (learn more in Recognitions in this section).

In 2015, Klabin received BRL 100 million of financial assistance from the Brazilian government among benefits and tax credits and grants for investments, research, and development. The company did not receive financial assistance related to grants, awards, royalty holidays, or assistance from export credit agencies.

The Brazilian government is not included in Klabin’s shareholding structure. [G4-EC4]

Total monetary value of financial assistance received from the Brazilian government [G4-EC4]

(in BRL) 2015 2014
Benefits and tax credits 69,000,000 49,000,000
Grants for investments, research and development, and other relevant types of grants 31,000,000 16,107,000
Financial incentives - 4,640,515.60
Total 100,000,000 69,747,515.60

Business performance

Forestry Business Unit

In 2015, our Forestry unit produced approximately 10.9 million tons of pine and eucalyptus logs, wood chips, and waste for energy. Of this total, 3.2 million tons were sold to sawmills and plywood plants; the remaining volume was transferred to our plants in Paraná, Santa Catarina, and São Paulo. Compared to 2014, the volume of log sales to third parties increased 12% during the year - partly an effect of the higher exchange rate over the course of 2015, boosting sales to customers exporting wooden products. The higher sales volume impacted net revenue from wood sales in 2015, which reached BRL 362 million - 9% above the result from 2014.

Learn more about this Business Unit in Klabin section.

Paper Business Unit

In 2015, Klabin adopted a successful strategy of directing paperboard production to the foreign market due to the economic crisis and recession in the domestic market. Sales volume of papers for packaging and coated paperboard in 2015 was 1.103 million tons, which was 8% higher than in 2014, given the greater paper and cardstock capacity and the increase in the export of these products.

Projects initiated in 2012 to increase paper and cardstock capacity were completed in the first half of 2015. The debottlenecking work at the plants in Angatuba and Piracicaba, SP, added 50,000 tons of production of paper for boxes; the new machine for recycled papers in Goiana, PE, added another 110,000 tons. At the end of 2015, these assets were already operating at full capacity. Machine 9 for cardstock in Monte Alegre, PR, which was retrofitted in 2014, also ended the year at its full production level, raising the sales volume of cardstock in 2015. The larger available volume after this increase in capacity and the more favorable average exchange rate for exports during the period resulted in net revenue of BRL 2,954 million, which was 29% higher than the previous year. [G4-13]

  • Cardstock

    It is worth mentioning the increase in sales volume in Brazil, despite the recession in the domestic market. However, the greatest growth was observed in exports. The favorable exchange rate and the less retracted foreign markets allowed for larger margins compared to 2014. With this trading mix, the total net revenue from coated cardstock sales reached R $ 2,096 million, a 26% increase compared to the previous year. With increased production availability, Klabin cardstock sales increased 8% in 2015, totaling a sales volume of 685,000 tons. A case to be noted is beer pack cartons: replaced by plastic packaging for some time, the card paper packs returned to the market as a differentiating element for premium beers, a trend that helped strengthen the demand for our products.

  • Kraftliner

    The sales volume of Klabin kraftliner and sack kraft increased 8% compared to 2014, and totaled 418,000 tons, mainly driven by the additional capacity of paper plants and exports. Our flexibility enabled an increased volume to be allocated to foreign markets, taking advantage of a higher average exchange rate scenario than 2014 as well as a retraction in Brazilian markets. In addition to a more favorable exchange rate, the average price of kraftliner increased by 4% (price in euros published by FOEX Indexes). Thus, net revenue from sales of kraftliner and sack kraft reached BRL 858 million, a 34% increase compared to 2014.

    Learn more about this Business Unit in Klabin section.

Conversion Business Unit

The major downturn in Brazil’s economic activity led Klabin to focus its packaging paper sales in foreign markets. Thus, there was a 3% drop in sales volumes of converted products, mainly traded in the domestic market, compared to 2014, closing 2015 with 690,000 tons sold. Despite the drop in volume, net revenue in 2015 increased by 4% over the previous year, totaling BRL 2,251 million.

The national economic scenario directly influenced the corrugated cardboard box market, which does not rely on exports. In addition to fewer sales, the competition with paper exports, and the increased cost of energy, fuel oil, chemicals, and other production inputs impacted corrugated cardboard producers.

In the industrial bags market, civil construction in Brazil had the worst result in the last 12 years in 2015, directly impacting cement sales. In this case, the drop in the sale of products related to construction was minimized by Klabin’s position in the Northeast, the market with greater stability compared to the rest of the country, and finally, by the successful strategy of developing new markets outside of Brazil, mainly in Mexico and the United States.

In 2015, exports of industrial bags increased 8% compared to 2014, with sales to nearly 25 countries in the Americas, Africa and Europe. In the United States, for example, we entered the industrial bag markets for flours and coffee, which require specific certifications. In Brazil, Klabin is working to diversify its supply of this product, looking into the coffee, flour, fertilizer and animal feed markets.

Learn more about this Business Unit in Klabin section.

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Wood supply

A new large plant, such as the Puma Unit in Ortigueira, PR, means greater demand for wood, the raw material that drives Klabin. Our wood comes mostly from our own forests, supplemented by the production that we acquired from partner or independent suppliers. Beginning production at the Puma Unit pulp plant, which occurred in March 2016, will lead Klabin to achieve an unprecedented operational milestone:

  • In 2016,
    it will take more than
    300,000 truck trips
    between forests and plants to supply wood to Klabin’s production lines
  • In 2015, a total of
     
    137,293 trips were
    made to supply wood
  • The world's largest forestry operation in a single site

The volume of wood produced in Paraná will more than double in order to guarantee the operation of the new plant — in a projection for the Puma Unit in full operation in 2016, approximately 2.5 million tons of eucalyptus wood and 1.2 million tons of pine wood will be required.

Ensuring this flow requires mid- to long-term planning in both developing the necessary forests and selecting and training the people who will fill the jobs created. In order to harvest and transport all of this wood, we began preparing in advance: in 2015 and early 2016, over 200 harvesting machine operators attended training courses at a Forestry Training Center created by Klabin. In addition, more than 180 truck drivers were trained through a partnership in cooperation with the National Transport Learning Service (SEndT) in Telêmaco Borba, PR.

Added to the employees trained since 2014, these workers join the teams of close to 620 operators and 500 drivers necessary for the harvest and transport of the raw material to the Puma Unit. This own wood comes from forests planted an average distance of 72 km from the new plant, reducing logistics costs and improving competitiveness of our industrial operations. Having completed its original mission, the Forestry Training Center will continue professional training for the operators and train new professionals for Klabin forestry units.

Supplier relations

Klabin's chain of suppliers is managed by Supply Chain Management, which is responsible for the flow of materials and monitoring of the company’s inventory levels. There are four management departments: Procurement, which handles the purchase of materials, services, inputs, and investments needed to supply all company production units; Domestic Logistics, which manages Klabin’s and third party fleets and supports the business areas with procuring logistics services or managing logistics activities, from harvesting the forests and supplying the plants to delivering our products to clients; International Logistics, responsible for import and export flows; and Planning, which ensures the operational efficiency of the business through the Sales & Operation Planning process, mainly dedicated to production planning. [G4-12]

Klabin has approximately 5,000 active suppliers throughout Brazil, supplying raw materials such as chemicals for pulp and paper, energy and fibers, and wood; providing logistics services, materials management, warehousing, and rental of forklifts; supply of auxiliary production materials, uniforms and personal protective equipment (PPE), bearings, pumps, cleaning supplies, security, maintenance, among others. Of this total, 813 suppliers are monitored through the Criticality and Sustainability Matrix, among which, 67% (equivalent to 547) were procured in states where Klabin has operations. [G4-12, G4-EC9]

In 2015, a total of 255 new suppliers were contracted for the services and inputs needed to implement the Puma Project in Ortigueira, PR. Among the suppliers, no selection and monitoring occurred pursuant to criteria pre-established by the headquarters. [G4-13, G4-EN32, G4-LA14, G4-HR10]

Percentage of the purchasing and contracting budget at important operating units that is spent on local suppliers, in 2015 (in %)
Paraná 62.9
São Paulo 52.7
Santa Catarina 50.8
Minas Gerais 28.4
Pernambuco 44.1
Rio Grande Do sul 18.8
Bahia 54.4

In 2014, Klabin had 558 monitored suppliers, of which 64% were considered local. The increase in the number of suppliers may be explained by the Puma Project, in Paraná, the state with the largest percentage of local procurement at Klabin. We consider “local” any supplier operating in the same state. [G4-EC9]

In 2013, our Procurement department prepared a criticality matrix to evaluate all contracted suppliers and the risks they pose to Klabin, from both financial and sustainability standpoint (There is no selection using these criteria, but they are used for assessment of contractors and, in case of non-compliance, they may be excluded from the group of suppliers). For suppliers assessed as being highly critical, the matrix defines actions to be taken to mitigate the risks identified. From a sustainability standpoint, aspects such as working conditions, health and safety management, legal compliance, ethical behavior, forced or compulsory labor, supply of hazardous products, and environmental licensing are mapped by the supplier criticality matrix. For the next cycle, the area aims to deepen and strengthen this analysis through audits. Among the new suppliers listed in this matrix, 100% underwent assessments on environmental impact, human rights, impacts on society, and labor practice. [G4-DMA, EN32, G4-LA14, G4-HR10, G4-SO9]

The Forest Units have a specific program for evaluating its wood suppliers. In 2015, the Controlled Wood Program, which uses methodology related to FSC® chain of custody certification, guaranteed 213 visits to certified and uncertified wood suppliers in Santa Catarina, and 313 visits in Paraná.

Regarding service providers, for cargo and personnel transportation, mechanical maintenance, road maintenance and conservation, and consulting firms, audits are carried out to verify compliance with labor and social legislation. When non-conformity is identified, an action plan is developed with the service provider and is monitored appropriately. In 2015, the forestry area carried out 67 inspection visits to all service providers in São Paulo and Santa Catarina, and to 48% of service providers in Paraná. [G4-EN32, G4-EN33, G4-LA14, G4-LA15, G4-HR10, G4-HR11, G4-SO10]

Visits to service providers of the forestry units in 2015
Paraná São Paulo Santa Catarina
Number of audits carried out 29 2 36
Number of suppliers submitted to audit 29 2 10
Number of non-conformities identified (action plans created) 59 0 15

Attention to human rights [G4-HR4, G4-HR5, G4-HR6]

At Klabin, we did not identify actual or potential risks in our operations or those of our suppliers regarding freedom of association and collective bargaining, child labor, or forced or compulsory labor. We focus our efforts on avoiding having suppliers that pose risk of forced labor or discrimination of any kind, and we respect the freedom of the professionals employed by our service providers. Our procurement contracts cover this aspect in specific clauses.

The values and principles that guide our relationship with neighboring populations, as well as with other stakeholders, are described in Klabin’s Code of Conduct, which is adopted by all our employees and disseminated to our business partners, and can be consulted at www.klabin.com.br/en/home. [G4-56]

In addition, our Social and Environmental Responsibility Policy for contracting suppliers establishes social and environmental criteria for their approval, requiring that they comply with labor and social security obligations, including preventing sexual and moral harassment, taking preventive actions related to occupational health and safety, and respecting diversity and the right to freedom of association of its employees with trade associations. Our contracts for services and materials cover this aspect in specific clauses.

Partnership with producers

All of our own forests are certified by the FSC® (Forest Stewardship Council®). However, we know that this is not enough: if we want to maintain a high level of global competitiveness, the wood we purchase from partner producers must also follow the scope of responsible management certification. This recognition, for example, certifies that the producer operates with social and environmental responsibility and meets the forest management standards accepted worldwide.

Klabin aims to certify all its partner suppliers by 2018, and actively works to help them achieve this objective. In 2015, a total of 77 producers were certified by the FSC® seal in the SLIMF standard (Small and Low Intensity Managed Forests), while another 208 were recommended for certification by the same standard, and 13 were certified by the FSC® Harmonized standard, leading to a total of over 250 of Klabin’s partner producers already certified.

Partner suppliers participate in Klabin’s Legal Woods Program (Programa Matas Legais), which guides forestry producers to comply with the Forest Code and improve the environmental condition of their property.

Another supplier category — the independent suppliers, those that do not maintain any link with the company — also receives attention from Klabin teams that prior to purchasing the wood and during forest operations, verify the owner’s documentation and operating processes to make sure that it meets all labor, environmental, and safety conditions required by forest operation laws. This process is called controlled wood, and is also recognized by the FSC®.

Both the forest partnership program and the Legal Woods program give forest producers tools that aid carrying out rural environmental registration. Certification participants receive technical information in lectures in order to answer questions about the process and the necessary procedures.

Our forestry operations

We have
activities in:
74 municipalities
Our forestry operations

The future is built today

In 2015, Klabin’s Forestry area began discussing a project for the near future, a vision to be realized in a few years, summarized in five points that make up our Forestry Purpose:

  1. 1
    Greater productivity — we want to obtain the largest productivity from forests in the global pulp and paper market. Klabin Forest Units are already among the best in the world, in terms of pulp production per planted hectare. Our goal is to consolidate our leadership position, further increasing the gap to our competitors.
  2. 2
    Lower operating costs — we want to produce at the lowest cost among global pulp and paper companies. The short distance between forests and plants, associated with the high productivity of the forests, gives Klabin the possibility of having the smallest cost/wood plant in the world. With the increased productivity of operations, our costs have been reduced in recent years.
  3. 3
    Community acceptance — we strive to be good neighbors and citizens. This effort includes large and small actions. Our tank trucks, for example, spray the roads where wood transport trucks pass in order to avoid raising dust. We change the routes, whenever possible, of these trucks so that they do not enter school areas or heavy pedestrian traffic areas, and we moved the limit of our plantations away from the fences of neighbors and the roads in order to avoid causing shade. Beginning 2016, we will implement a program to measure the acceptance of our activities in all the municipalities in which we operate, with the participation of several stakeholders. We would like to regularly assess how we are viewed so that we can improve our community relations.
  4. 4
    A benchmark in safety — we aim for world-class work safety. We create programs that seek to develop a safety culture that allows us to achieve high levels of productivity while preserving the well-being of our employees (read more in Health and safety of direct and indirect employees).
  5. 5
    Sustainable forest management — we work to maintain our forest management as a reference among companies in the global pulp and paper market, reaching the greatest productivity potential while protecting biodiversity and natural resources such as water and soil. Klabin develops its forest management in a mosaic pattern: pine and eucalyptus plantations are alternated with native forest areas —preserved areas of the Brazilian Atlantic Rainforest — in order to create ecological corridors that preserve the local wildlife and flora.
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Health and safety of direct and Indirect employees

At Klabin, the culture values the development of people, their talent, and interdependence among employees. We do this on a foundation that prioritizes the health care and safety of everyone. We foster leadership, individual and collective care, and teamwork. Thus, we achieve excellence, innovation, sustainability and a vision for the future, an extraordinary Klabin. These have been the constant values in the history of growth that our employees have been building for over a century.

A special element to building Klabin’s work environment and corporate culture is the 360º Performance Assessment Cycle, held every two years. Directors, managers, coordinators, and specialists have their competencies discussed and assessed by their direct hierarchical superiors, by their peers, and their subordinates. Each manager also carries out a self-assessment. In 2015, another one of these cycles was carried out. A total of 433 leaders participated in the process, culminating in the work of 35 assessment committees, as well as the preparation of individual development plans for 2016 and in constructive dialogues for performance management.

Our workforce

Total number of employees [G4-10]

At the end of 2015, Klabin had 16,455 employees, of which 12,522 were direct employees, 3,682 were Indirect employees, and 251 were interns and apprentices. Of this total, 68% are in sulern Brazil, where the company’s main operations are located, 22% are in the suleast, and 10% are in the Northeast. Among direct employees, Klabin has had 90% men and 10% women since 2014. The beginning of the Puma Unit operation in March 2016 will mean employing nearly 1,400 direct and Indirect workers, considering the manufacturing operation and the forest operation.

Klabin’s workforce

2015 Total: 16,455
  • Direct employees*
  • Indirect employees (contractors and temporary)
  • Other (apprentices and interns)**
2014 Total: 16,945

*Includes employees of the Pilar Unit (Argentina).
** As of 2015, the item "Other" considers only the number of interns and apprentices. Temporary workers are now considered “Indirect employees”.

Total number of employees by employment contract in 2015

Open-ended or fixed term

Fixed or temporary term

Other (apprentices and interns)

  • Men
  • Women
total of employees: 12,651
Total number of employees by region and gender in 2015
Direct employees Indirect employees1 Other (apprentices and interns)
Men Women Men Women Men Women Total %
South 7,413 638 2,700 - 69 57 10,877 68%
Southeast 2,537 515 423 - 35 30 3,540 22%
Northeast 1,231 66 243 - 32 28 1,600 10%
Total 11,181 1,219 3,366 - 136 115 16,017 100%
1 Klabin does not have data for Indirect employees broken down by gender.
Total number of employees by business unit in 2015
Direct employees Indirect employees Other (apprentices and interns) Total
Paper and recycled material 4,022 1,206 74 5,302
Forestry 2,417 1,470 27 3,914
Packaging 3,313 486 105 3,904
Bags 1,086 53 26 1,165
Corporate 809 88 16 913
Pulp for paper 753 63 3 819
Total 12,400 3,366 251 16,017

All of our contracts rigorously comply with labor legislation. Our policy is to hire professionals who are residents in the communities that are close to our operations. In management positions at the levels of supervisor and shift leader, for example, residents of cities close to our factories and forests account for 80% of professionals. [GRI G4-EC6]

Klabin’s workforce is 90% male. In the organization's governance bodies, which includes directors, managers, and coordinators, this percentage is 84%. In terms of age, 35% of employees are under 30 years old, while 56% are between 30 and 50 years old. Of the total number of employees, 3.7% declared themselves black, while in the governance bodies, this percentage is 0.28%.

Percentage of employees by job category and gender in 2015 (in %) [G4-LA12]
Men Women Total
Administrative 64 36 100
Board 79 21 100
Coordinators 82 18 100
Directors 94 6 100
Specialists 75 25 100
Managers 89 11 100
Operational 96 4 100
Total 90 10 100
Percentage of employees by job category and age bracket in 2015 (in %) [G4-LA12]
Under 30 From 30 to 50 Over 50 Total
Administrative 35 55 10 100
Board 0 17 83 100
Coordinators 7 74 19 100
Directors 0 19 81 100
Specialists 5 64 31 100
Managers 0 63 37 100
Operational 37 56 7 100
Total 35 56 9 100
Percentage of employees by job category and minority groups in 2015 (in %) [G4-LA12]
Black Indigenous Total
Administrative 1.6 0 1.6
Board 0 0 0
Coordinators 0.4 0 0.4
Directors 0 0 0
Specialists 0.7 0 0.7
Managers 0 0 0
Operational 4.3 0.1 4.4
Total 3.7 0.1 3.8

Total number of employees covered by collective bargaining agreements [G4-11]

Klabin maintains direct negotiations with trade unions and respects the existing union leaders in each unit, allowing the unionization of employees and for the unions to exercise communication with employees through pamphlets, meetings, and other ways. Among employees, 100% are covered by collective bargaining agreements.

Ratio between remuneration of the highest paid individual in the organization and the average remuneration of all employees [G4-54]

In 2015, the ratio between the remuneration of the highest paid Klabin individual and the average pay of all other employees was 1.25%.

Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation [GRI G4-EC5]

Entry level wage paid by Klabin is 1.15 times the national minimum wage (remuneration for men in forestry), which, in 2015, totaled BRL 788.00. In the Units of Ortigueira, PR, and Piracicaba, SP, this ratio is 1.82 for both genders, and in Monte Alegre, PR, where most of the company's employees are located, the ratio is 1.66 for men and women. The ratio between the lowest and highest wage paid by the company was approximately thirty times.

Ratio between the entry level wage paid by the organization and the national minimum wage in 2015, by significant operating unit:
Men Women
Angatuba (SP) 1.92 1.92
Betim (MG) 1.35 1.35
Correia Pinto (SC) 1.29 1.29
São Paulo (SP) 1.92 2.10
Feira de Santana (BA) 1.48 1.48
Forestry (PR e SC) 1.15 1.31
Goiana (PE) 1.28 1.46
Itajaí (SC) 1.51 1.51
Jundiaí (SP) 1.65 1.82
Lages (SC) 1.59 1.77
Monte Alegre (PR) 1.66 1.66
Ortigueira (PR) 1.82 1.82
Otacílio Costa (SC) 1.29 1.29
Piracicaba (SP) 1.82 1.82
São Leopoldo (RS) 1.24 1.24
*All indicators consider the numbers of all Klabin's units, except Pilar (Argentina). [G4-EC5]

Klabin has an open pension plan with defined contribution for its employees. The benefit is offered to all employees and is the same for all positions. There is, however, a minimum benefit for employees with salaries below BRL 4,736 and over 55 years of age. This is a payment of up to six times their salary, made upon termination. The employee pays nothing to be eligible for this benefit. Klabin's pension plan for its employees is composed of the following contributions:

  • Employee contribution: from 5% to 9% of their contribution salary (the difference between the salary and BRL 4,736.00);
  • Klabin contribution: from 100% to 200% of the employee’s contribution, according to length of service. [G4-EC3]

More safety in Forestry

Klabin's forestry area has a challenging goal: to reach an accident rate of less than one accident for every one million man-hours worked within three years. In other words, achieve a world-class level of work safety.

For this challenge, it is necessary to develop a safe production culture, contributing to fostering an active care practice, in which employees perform their activities taking care of themselves, of their co-workers and, mainly, allowing being taken care of by their co-workers. Klabin’s concern is with creating the conditions necessary to give root to this culture in order to ensure the safety and well-being of its direct and Indirect employees.

To this end, we have in place training programs, awareness campaigns, monitoring, and inspections designed to prevent accidents in all our areas of operation. These actions, as well as the Internal Accident Prevention Committees (Cipas) in all units, feed the company with information for our Occupational Health and Safety Program (OHS). At the corporate level, there is also a Health and Safety Committee, composed of 30 members from all hierarchical levels. Its role is to act in all units through the leaders, with preventive actions, campaigns, or programs with the purpose of generating change and commitment. All Klabin employees are represented in these committees, since the leadership is involved in their activities and decisions. [G4-LA5]

Safety practices established by labor legislation and collective bargaining agreements are strictly followed by our employees. One of our standards is also that our service providers participate in Contractors Safety Committees, known as Comsecons, which exist in each unit. There are also clauses about OHS in all formal agreements with trade unions, aiming for worker safety.

Safety Programs in Forestry

Caminho Certo (“The Right Road”) Program

Professional wood transport truck drivers of the forestry area attend quarterly lectures on traffic safety. On these occasions, they also have the opportunity to share stories, facts, and experiences, which are later published in the comic book Boleia, which is edited by Klabin and allows the driver to bring safety information to their families.

Family Forestry

The employee's spouse or partner may help the professional build awareness about safe attitudes, helping to prevent accidents. Therefore, we developed a program that proposes bringing these spouses or partners to their companion’s workplace to learn about the job’s difficulties and risks. On this occasion, they also receive guidance about safe behavior, which they may pass on to others.

Matrix management in Safety (GMS - Gerenciamento Matricial de Segurança)

This is a new methodology that reinforces the safe production culture based on the control of safety reports and occurrences. The project is based on three pillars: cross control of the information; developments; and systematic follow-up of the information.

Monitored safety

As essence of safety culture at Klabin, potentially high-risk incidents are constantly analyzed: dangerous work situations that do not cause accidents may contain lessons for learning about prevention. For this, we must first monitor, study the causes, and disclose the results of studies of high-risk incidents in the same way we do with the accidents.

No one cares for themselves only, and no one puts only themselves at risk: what each person does affects everyone, and an individual unsafe act — even if it did not cause an accident or there were no victims — may affect the safety of many. Similarly, a potentially high-risk incident that was identified, analyzed, discussed, and publicly disclosed will increase everyone’s safety, avoiding repeating the high-risk behaviors that almost led to an accident.

Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender [G4-LA6]

Occupational Health and Safety (OHS) is an important aspect throughout Klabin. For all units, the register and statistical reporting of indicators are made by means of control tools for the management system, respecting the current legislation and the parameters of NBR14280 and OHSAS 18001. Some rates are not broken down by gender because such breakdown does not make sense for our management. The rates of occupational illness and absenteeism are not monitored for contractors. Next, we list our OHS rates, broken down by region and gender, for direct and Indirect employees, when available. On January 5, 2015, a truck belonging to the company Triangulo Logística Forestry transporting biomass in the Telêmaco Borba region lost control and went off the road, colliding with the pine trees on the side of the road. The driver died at the scene of the incident. An investigation committee was formed to analyze the causes of the accident, and recommended improvements to increase road safety. Suggestions included requesting tree removal from the right of way and testing using cameras in the cabins of trucks.

Accident frequency rate – NBR 14,280
2015 2014
Direct employees Indirect employees Total Direct employees Indirect employees Total
South 3.00 1.87 2.11 3.00 3.20 3.10
Southeast 4.10 12.09 5.17 2.30 2.70 2.40
Northeast 4.63 5.23 4.00 1.90 6.80 3.00
Men 3.80 2.20 2.70 2.90 3.00 2.90
Women 0.90 1.00 0.90 0.60 5.10 3.20
Total 3.58 2.08 2.51 2.60 3.30 2.90
Accident frequency rate – OHSAS 18001
2015 2014
Direct employees Indirect employees Total Direct employees Indirect employees Total
South 0.60 0.37 0.42 0.60 0.60 0.60
Southeast 0.82 2.42 1.03 0.50 0.50 0.50
Northeast 0.93 1.05 0.95 0.40 1.40 0.60
Men 0.80 0.40 0.50 0.60 0.60 0.60
Women 0.20 0.20 0.20 0.10 1.00 0.60
Total 0.71 0.42 0.50 0.52 0.67 0.58
Accident severity rate – NBR 14,280
2015 2014
Direct employees Indirect employees Total Direct employees Indirect employees Total
South 182 282 260 128 1,222 617
Southeast 94 154 102 792 18 638
Northeast 348 213 325 32 47 36
Men 119 302.5 271 332 1,175 621
Women 7.9 63.3 46.4 9 101 58
Total 180 279 249 302 1,010 564
Accident severity rate – OHSAS 18001
2015 2014
Direct employees Indirect employees Total Direct employees Indirect employees Total
South 36 56 52 26 244 123
Southeast 19 31 20 158 4 128
Northeast 70 43 65 6 9 7
Men 39.8 60.5 54.3 66 235 124
Women 1.6 12.7 9.3 2 20 12
Total 36 56 50 60.4 202 112.8
Lost-time injury days
2015 2014
Direct employees Indirect employees Total Direct employees Indirect employees Total
South 2,552 14,177 16,729 1,639 12,672 14,311
Southeast 549 140 689 4,783 27 4,810
Northeast 977 122 1,099 85 35 120
Men 4,060 14,111 18,171 6,492 12,563 19,055
Women 18 328 346 15 167 182
Total 4,078 14,439 18,517 6,507 12,734 19,241
Occupational illness rate1
2015
Direct employees Indirect employees Total
South 5 - 5
Southeast 0 - 0
Northeast 0 - 0
Men 5 - 5
Women 0 - 0
Total 5 - 5
1The occupational illness rate was only reported for 2015 due to a change in the calculation method, and is not available for Indirect employees.
Rate of absenteeism
2014 2015
Paper and recycled material Forestry Packaging Bags Corporate Paper and recycled material Forestry Pulp Packaging Bags Corporate
South Employees 2.05 0.81 2.78 0.79 - 1.67 1.17 0.08 1.37 1.16 -
Contractors NA NA NA NA NA NA NA NA NA NA NA
Total 2.05 0.81 2.78 0.79 - 1.67 1.17 0.08 1.37 1.16 -
Southeast Employees 1.65 0.19 2.80 - 0.88 1.68 0.16 - 2.12 - 0.59
Contractors NA NA NA NA NA NA NA NA NA NA NA
Total 1.65 0.19 2.8 - 0.88 1.68 0.16 - 2.12 - 0.59
Northeast Employees 2.78 - 2.07 2.42 - 1.59 - - 2.18 3.38 -
Contractors NA NA NA NA NA NA NA NA NA NA 2.05
Total 2.78 - 2.07 2.42 - 1.59 - - 2.18 3.38 NA
Men Employees 1.93 0.78 2.79 1.41 0.55 1.77 0.82 0.02 2.11 1.79 2.05
Contractors NA NA NA NA NA NA NA NA NA NA 1.65
Total 1.93 0.78 2.79 1.41 0.55 1.77 0.82 0.02 2.11 1.79 NA
Women Employees 1.56 1.72 3.48 1.8 1.28 2.34 0.70 0.35 2.48 0.97 1.65
Contractors NA NA NA NA NA NA NA NA NA NA 2.78
Total 1.56 1.72 3.48 1.8 1.28 2.34 0.70 0.35 2.48 0.97 0.62
Number of deaths
2015 2014
Direct employees Indirect employees Total Direct employees Indirect employees Total
South 0 1 1 0 2 2
Southeast 0 0 0 0 0 0
Northeast 0 0 0 0 0 0
Men 0 1 1 0 2 2
Women 0 0 0 0 0 0
Total 0 1 1 0 2 2

In order to better compare data, Klabin also monitors all rates by business unit.

Accident frequency rate - NBR 14,280
2015 2014
Papers and recycled materials Forestry Pulp Packaging Bags Corporate Papers and recycled materials Forestry Packaging Bags Corporate
South Direct employees 2.0 3.2 1.5 6.7 3.0 0.0 1.2 3.8 7.5 2.4 0
Indirect employees 0.7 1,9 2.0 5.3 3.2 0.0 3.1 2 8.6 11.8 0
Total 1.4 2.6 2.0 6.6 3.0 0.0 2.1 2.85 1.5 4 0
Southeast Direct employees 2.5 18.5 0.0 4.4 0.0 3.5 2.3 0 2.6 0 1.2
Indirect employees 24.7 18.8 0.0 8.6 0.0 0.0 0 0 4.4 0 0
Total 6.2 18.7 0.0 5.0 0.0 3.5 1.4 0 2.9 0 1.2
Northeast Direct employees 6.4 0.0 0.0 5.0 0.0 0.0 0 0 2.5 0 0
Indirect employees 15.8 0.0 0.0 4.1 0.0 0.0 0 0 2.9 0 0
Total 7.5 0.0 0.0 4.8 0.0 0.0 0 0 2.6 0 0
Men Direct employees 2.5 3.7 1.5 5.4 2.8 3.9 1.3 3.8 3.6 2 0
Indirect employees 1.7 2.3 2.1 6.5 3.2 0.0 3.3 2 4.9 10.4 0
Total 2.1 3.1 2.1 5.6 2.9 3.9 2.2 2.8 3.9 3.4 0
Women Direct employees 1.5 0.0 0.0 1.4 0.0 0.0 0 0 0 0 6
Indirect employees 0.0 0.0 1.0 7.3 0.0 0.0 0 0 0 0 0
Total 0.0 0.0 1.0 2.3 0.0 0.0 0 0 0 0 6
Accident frequency rate – OHSAS 18001
2015 2014
Papers and recycled materials Forestry Pulp Packaging Bags Corporate Papers and recycled materials Forestry Packaging Bags Corporate
South Direct employees 0.4 0.6 0.3 1.4 0.6 0.0 0.2 0.8 1.5 0.5 0
Indirect employees 0.1 0.4 0.4 1.1 0.6 0.0 0.6 0.4 1.7 2.4 0
Total 0.3 0.5 0.4 1.3 0.6 0.0 0.4 0.6 0.3 0.8 0
Southeast Direct employees 0.5 3.7 0.0 0.9 0.0 0.7 0.5 0 0.5 0 0.2
Indirect employees 5.0 3.8 0.0 1.7 0.0 0.0 0 0 0.9 0 0
Total 1.2 3.7 0.0 1.0 0.0 0.7 0.3 0 0.6 0 0.2
Northeast Direct employees 1.3 0.0 0.0 1.0 0.0 0.0 0 0 0.5 0 0
Indirect employees 3.2 0.0 0.0 0.8 0.0 0.0 0 0 0.6 0 0
Total 1.5 0.0 0.0 1.0 0.0 0.0 0 0 0.5 0 0
Men Direct employees 0.5 0.7 0.3 1.1 0.6 0.8 0.3 0.8 0.7 0.4 0
Indirect employees 0.3 0.5 0.4 1.3 0.6 0.0 0.7 0.4 1 2.1 0
Total 0.2 0.6 0.4 1.1 0.6 0.8 0.4 0.6 0.8 0.7 0
Women Direct employees 0.3 0.0 0.0 0.3 0.0 0.0 0 0 0 0 1.2
Indirect employees 0.0 0.0 0.2 1.5 0.0 0.0 0 0 0 0 0
Total 0.2 0.0 0.2 0.5 0.0 0.0 0 0 0 0 1.2
Accident severity rate – NBR 14,280
2015 2014
Papers and recycled materials Forestry Pulp Packaging Bags Corporate Papers and recycled materials Forestry Packaging Bags Corporate
South Direct employees 139 273 10 66 238 0 90 153 89 242 0
Indirect employees 235 1,583 153 159 19 0 1,265 1,384 24 109 0
Total 188 892 150 76 203 0 644 827 24 220 0
Southeast Direct employees 31 575 0 118 0 31 245 0 1,067 0 22
Indirect employees 637 245 0 35 0 0 6 0 26 0 0
Total 132 411 0 106 0 31 153 0 26 0 22
Northeast Direct employees 1,670 0 0 95 0 0 0 0 42 0 0
Indirect employees 1,758 0 0 23 0 0 2,901 0 51 0 0
Total 1,681 0 0 81 0 0 96 0 51 0 0
Men Direct employees 257 307 10 112 220 34.3 106 151 596 205 0
Indirect employees 290.9 1,740.4 160.6 51.2 19.5 0 1,140 1,366 34 97 0
Total 272.9 984.6 158.1 102.7 190.8 34.3 576 817 481 188 0
Women Direct employees 22 0 0 4 0 0 0 0 0 0 9
Indirect employees 0 0 81.7 14.6 0 0 0 0 0 0 0
Total 11.9 0 80.3 5.7 0 0 0 0 0 0 9
Accident severity rate– OHSAS 18001
2015 2014
Papers and recycled materials Forestry Pulp Packaging Bags Corporate Papers and recycled materials Forestry Packaging Bags Corporate
South Direct employees 28 55 2 13 48 0 18 30.6 17.8 48.4 0
Indirect employees 47 317 31 31 4 0 253 276.8 4.8 21.8 0
Total 38 178 30 15 41 0 128.8 165.4 4.8 44 0
Southeast Direct employees 6 115 0 24 0 6 49 0 213.4 0 4.4
Indirect employees 127 49 0 7 0 0 1.2 0 5.2 0 0
Total 26 82 0 21 0 6 30.6 0 5.2 0 4.4
Northeast Direct employees 334 0 0 19 0 0 0 0 8.4 0 0
Indirect employees 352 0 0 5 0 0 580.2 0 10.2 0 0
Total 336 0 0 16 0 0 19.2 0 10.2 0 0
Men Direct employees 51 62 2.1 23 44 6.9 21.2 30.2 119.2 41 0
Indirect employees 58.2 348.1 32.1 10.2 3.9 0 228 273.2 6.8 19.4 0
Total 54.6 196.9 31.6 20.5 38.2 6.9 115.2 163.4 96.2 37.6 0
Women Direct employees 4.5 0 0 0.8 0 0 0 0 0 0 1.8
Indirect employees 0 0 16.3 4.4 0 0 0 0 0 0 0
Total 2.4 0 16.1 1.1 0 0 0 0 0 0 1.8
Los-time injury rate
2015 2014
Papers and recycled materials Forestry Pulp Packaging Bags Corporate Papers and recycled materials Forestry Packaging Bags Corporate
South Direct employees 758 1,294 7 98 395 0 521.00 557 154 407 0
Indirect employees 1,338 6,711 6,092 30 6 0 6,519 6,144 11 37 0
Total 2,096 8,005 6,099 128 401 0 7,031 6,671 165 444 0
Southeast Direct employees 25 31 0 458 0 35 213 0 4,551 0 15
Indirect employees 103 13 0 24 0 0 33 0 24 0 0
Total 128 44 0 482 0 35 246 0 4,575 0 15
Northeast Direct employees 787 0 0 190 0 0 0 0 85 0 0
Indirect employees 111 0 0 11 0 0 30 0 35 0 0
Total 898 0 0 201 0 0 30 0 120 0 0
Men Direct employees 1,555 1,325 7 743 395 35 734 557 4,790 407 0
Indirect employees 1,552 6,724 5,766 65 0 0 6,525 6,114 28 28 0
Total 3,107 8,049 5,773 808 395 35 7,250 6,671 4,818 435 0
Women Direct employees 15 0 0 3 0 0 0 0 0 0 15
Indirect employees 0 0 326 3 0 0 57 0 42 9 0
Total 15 0 326 6 0 0 57 0 42 9 15
Occupational illness rate1
2015
Papers and recycled materials Forestry Pulp Packaging Bags Corporate
South Direct employees 3 1 0 0 1 0
Indirect employees - - - - - -
Total 3 1 0 0 1 0
Southeast Direct employees 0 0 0 0 0 0
Indirect employees - - - - - -
Total 0 0 0 0 0 0
Northeast Direct employees 0 0 0 0 0 0
Indirect employees - - - - - -
Total - - - - - -
Men Direct employees 3 1 0 0 1 0
Indirect employees - - - - - -
Total 3 1 0 0 1 0
Women Direct employees 0 0 0 0 0 0
Indirect employees - - - - - -
Total 0 0 0 0 0 0
1 The occupational illness rate was only reported for 2015 due to a change in the calculation method, and is not available for indirect employees.
Number of deaths
2015 2014
Papers and recycled materials Forestry Pulp Packaging Bags Corporate Papers and recycled materials Forestry Packaging Bags Corporate
South Direct employees 0 0 0 0 0 0 0 0 0 0 0
Indirect employees 0 1 0 0 0 0 1 1 0 0 0
Total 0 1 0 0 0 0 1 1 0 0 0
Southeast Direct employees 0 0 0 0 0 0 0 0 0 0 0
Indirect employees 0 0 0 0 0 0 0 0 0 0 0
Total 0 0 0 0 0 0 0 0 0 0 0
Northeast Direct employees 0 0 0 0 0 0 0 0 0 0 0
Indirect employees 0 0 0 0 0 0 0 0 0 0 0
Total 0 0 0 0 0 0 0 0 0 0 0
Men Direct employees 0 0 0 0 0 0 0 0 0 0 0
Indirect employees 0 0 0 0 0 0 0 0 0 0 0
Total 0 0 0 0 0 0 0 0 0 0 0
Women Direct employees 0 0 0 0 0 0 0 0 0 0 0
Indirect employees 0 0 0 0 0 0 0 0 0 0 0
Total 0 0 0 0 0 0 0 0 0 0 0

For the sake of health

Klabin cares for its employees with programs focused on health and well-being.

  • Programa Viver Bem (Living Well Program) – A telephone line that operates 24 hours a day, seven days a week and, in a first approach, gives advice to help workers from any area of the company solve personal problems. A team trained to identify the nature of the problem and refer the case to be assessed by the most appropriate professional, who may be a psychologist, a social worker, a lawyer, or a financial advisor, is always on call. Klabin does not have access to the calls; they are received by an independent company. If the subject is Klabin itself, the issue is brought to the company’s Ombudsman's office.
  • Programa Viver Bem Sempre (Living Well Always Program) – A complement to the Living Well Program especially created to help employees think about the future. Meetings are held to discuss issues related to professional maturity, answer questions about retirement planning and the legal and financial issues related to it, and help develop a life project.
  • Health and Safety Events – All Klabin's industrial units offer to employees initiatives related to health and safety. These events are linked to the National Health Day or Internal Week for the Prevention of Accidents at Work (SIPAT) and provide measurements of outpatient monitoring rates, lectures on healthy eating, physical activity, and oral and hearing health. An example is the 2nd Health Week held in the Unit in Goiana, PE, with the participation of 60 employees. Another sample of this engagement were the basic health guidelines and medical exams such as vision, blood pressure, and cholesterol and blood sugar levels, are offered for free to the population of Angatuba, SP, in an event held by Klabin in the city square, along with the city police department, Sesi, and other partners in that region. In 2015, over 4,000 people attended.
  • Disease Awareness – Once a year, all Klabin units hold an Internal Accident Prevention Week (SIPAT). During the week, the employees and their families attend lectures about the risks of occupational illness, sexually transmitted diseases (STDs), and other diseases. Throughout the year, awareness and prevention campaigns are held about breast cancer, diabetes, and prostate cancer.

The Business School expands

The Klabin School of Business (ENK) is one of the tools we have developed in order to foster a culture in which each person takes charge of his or her own professional development.

Organized into "knowledge trails", employees are able to find the appropriate training for each stage of their professional life. Content is available online on the ENK Portal, in workshops and classroom training. On the portal, there are courses, videos, articles, seminars, posts, polls, and debates about various topics, such as ethics, negotiation, and innovation. Among the face-to-face aspects are leadership programs developed in a customized manner, in order to help Klabin leaders achieve extraordinary results through people. The in-person and online programs promote a combination of ways to learn about management, technical, and operational content. In addition, they represent an open space for collaboration, promoting the exchange of information between professionals in different platforms.

Founded in 2013, the Klabin School of Business already has results of great success: nearly 7,000 users have access to its content, a total of 4,500 of which accessed the portal in 2015. Intended for various positions, among directors, managers, coordinators, specialists, supervisors, and superior and administrative technicians, the portal also extended access to other levels of positions and, in certain units in Paraná and Santa Catarina, to all levels. In the same year, the portal was extended to the application in a mobile version. The next step will be to extend it to other technical and operational staff, continuing the same concept: structured learning tracks that each individual should follow throughout his or her career in order to achieve the professional goals he or she has chosen. The School of Business also has a resource for faster information. The Portal’s “Pills of Knowledge” are 60-second videos about various topics, such as presentation skills, the Portuguese language, among others.

Average number of annual training hours per employee, by gender and employee category [G4-LA9]

In 2015, Klabin offered over 606,000 hours of training to 12,570 employees, totaling an average of 48.3 hours per employee (training man-hours). The number increased compared to 2014, especially for directors and staff at technical and operational levels. For the latter, we offered over 480,000 hours of training, which reached over 9,000 employees.

Average number of training hours per employee, by employee category
2015 2014
Number of participants Total number of hours Hours per employee (training man-hours) Number of participants Total number of hours Hours per employee (training man-hours)
Directors 16 97 6.1 16 6.8 2.3
Men 15 53 3.5 15 6.8 2.3
Women 1 44 44.0 1 0.0 0.0
Managers and coordinators 343 21,725 63.3 306 15,591.2 55.3
Men 288 17,480 60.7 259 13,053.1 55.3
Women 55 4,245 77.2 47 2,538.1 55.2
Administrative level 895 19,990 22.3 771 18,016.4 32.9
Men 484 9,973 20.6 413 8,898.8 33.2
Women 411 10,017 24.4 358 9,117.6 32.7
Technical level 1,206 81,488 67.6 1,133 57,361.2 42.0
Men 871 67,471 77.5 827 44,797.4 42.3
Women 335 14,017 41.8 306 12,563.8 40.9
Operational level 9,916 480,610 48.5 8,806 334,125.8 40.7
Men 9,504 452,642 47.6 8,471 326,309.7 41.3
Women 412 27,968 67.9 335 7,816.2 24.0
Apprentices 194 2,890 14.9 173 4,095.1 25.1
Men 102 1,444 14.2 99 2,884.0 31.7
Women 92 1,446 15.7 74 1,211.1 16.8
Total1 12,570 606,800 48.3 11,205 429,196.4 40.6
1 Members of the Board, interns, and indirect employees were not included in this calculation
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Certifications, commitments, and recognition

To assure clients, neighboring communities, and society that it follows best practices in social and environmental responsibility, Klabin seeks certifications recognized by global markets.

Awarded by independent organizations that set standards and audit compliance with those standards, these certifications allow us to state, for example, that all raw material from our planted forests is cultivated appropriately from an environmental and social standpoint — an advantage for clients who want to assure their consumers that they use sustainable packaging for their products. Similarly, we help partner producers — from which we purchase part of the wood for our plants — to also seek certification, by adhering to environmental, labor, and social standards now required by the most developed markets.

Klabin’s main international certifications

  • FSC® – FOREST STEWARDSHIP COUNCIL®

    This certification ensures correct forest management according to ten principles, among them the efficient use of forest products and services, the well-being of workers and communities, biodiversity conservation, a detailed management plan, monitoring, and assessment of environmental and social impact.

    Klabin FSC® Certifications

    • Packaging – FSC®-C001941
    • Forestry – FSC®-C100282, C022516, C023492, C007520
    • Paper – FSC®-C019124, FSC®-C018669 e FSC®-C006109
    • Recycled materials – FSC®-C001941
    • Industrial bags – FSC®-C017793
    • Trade – FSC®-C020857
    • Pulp – FSC®-C129105
  • OK COMPOST

    Klabin is the first Brazilian company from the paper and pulp industry to have its cement bags certified by the Belgian certification OK compost, which guarantees that the paper bags decompose completely within twelve weeks without posing any risk of environmental contamination.

  • FSSC 22000

    One of the most advanced standards used to ensure the origin of paper for food packaging. The certification was created based on the ISO 22000, complementing it by clearly specifying the necessary prerequisites for producing packaging that guarantees the health of end consumers. It determines prerequisites such as cleanliness and organization of the production area, as well as how to control the quality of water, air, and pests, necessary to produce packaging for food.

  • ISEGA

    Guarantees the quality of the paper used to produce packaging that comes into contact with food.

  • ISO 14001

    Defines the methodology used to implement a certified Environmental Management System. It is globally recognized as a method of improving an organization’s environmental performance and controlling costs.

  • ISO 9001

    Contains guidelines that ensure a management model that can guarantee product uniformity. It covers all stages of quality-related processes, from design to delivery of the final product.

  • OHSAS 18001

    Enables the control and improvement of the performance level of health and safety management. Applying OHSAS 18001 reflects Klabin’s concern for the physical integrity of its employees and partners.

  • TPM – TOTAL PRODUCTIVE MAINTENANCE

    Created in 2002, Klabin Superar (PKS) is a continuous improvement program that uses the Japanese methodology Total Productivity Management (TPM). The main objectives are to reduce costs, increase productivity, improve quality, simplify product inventory, eliminate work accidents, and appreciate people.

  • TOP EMPLOYERS

    Klabin is the first company in Brazil's paper and pulp industry to receive the Top Employers seal, an internationally recognized certification in the area of human resources. Issued by the Top Employers Institute, based in the Netherlands, this certification is granted after a rigorous evaluation process and audit, and each year highlights the companies with significant personnel management practices.

Environmental management recognition

Two special recognitions attest to the care and efficiency of our environmental management in 2015:

  • Environmental Performance Report 2015 – WWF

    For the second time, Klabin participated in the Environmental Paper Company Index (EPCI) Environmental Performance Report, developed every two years by the World Wildlife Fund (WWF). The company achieved an 82% success rate in the report, a 7.5% increase in the overall index compared to the previous study, which was published in 2013. The WWF assessed the performance of 80 companies in the European, North American, South American, Asian, and African paper industries. In the description of the factors contributing to the index, we were 100% successful in the Responsible Fiber Supply item, and 81% in the Clean Production item.

  • Best Natural Capital Management Practices – CDP Latin America 2015

    Klabin was recognized by the Carbon Disclosure Project (CDP) as the company with the Best Natural Capital Management Practices. The CDP is an initiative that brings together Water Risk Management, Internal Carbon Pricing, and Natural Capital Management experiences from the 20 companies with best scores, according to the CDP’s assessment methodology.

Our commitments [G4-15]

Klabin endorses several charters, principles, commitments, and initiatives aligned with its sustainability positioning.

  • Global Compact (since 2003)

    International business mobilization supported by the United Nations (UN) which promotes ten principles that bring together core values in the areas of environment, human and labor rights, and anti-corruption. The Global Compact is a company’s contribution to the search for a more sustainable and inclusive global economy.

  • Carbon Disclosure Project (CDP) (since 2006)

    A global initiative to facilitate the dialogue between investors and companies seeking to minimize the environmental impact of their businesses in the face of climate change. Learn more in the Sustainability section.

  • Companies for the Climate (EPC) (since 2009)

    A permanent business platform aiming to mobilize, coordinate, and raise awareness among business leaders about managing and reducing greenhouse gas emissions (GHGs), managing climate risk, and proposing public policies and positive incentives in the context of climate change.

  • Corporate Sustainability Index (ISE) (since 2013)

    Created in December 2005 by BM&FBOVESPA, the index seeks to assess the different aspects of sustainability in an integrated manner. Its goal is to act as a catalyst for best practices in the Brazilian business environment. Companies are selected based on criteria established by the São Paulo School of Business Administration, of the Getulio Vargas Foundation (Eaesp-FGV).

  • Millennium Development Goals (since 2013)

    The Millennium Development Goals (MDGs) were established by the United Nations in 2000 with the support of 191 nations. They are a universal commitment to eradicate poverty and increase the planet’s sustainability, translated into eight goals - the 8 Millennium Development Goals. They are:

    1. Eradicate extreme poverty and hunger;
    2. Achieve universal primary education;
    3. Promote gender equality and empower women;
    4. Reduce child mortality;
    5. Improve maternal health;
    6. Fight AIDS, malaria, and other diseases;
    7. Ensure environmental sustainability and quality of life;
    8. Establish a global partnership for development.
  • Sustainable Development Goals (SDGs) (since 2015)

    Sustainable Development Goals (SDGs) is the current initiative proposed by the Millennium Development Goals - a global agenda with 17 objectives and 169 goals set by the United Nations (UN) for governments, civil society, and the private sector. According to the objectives and goals, global actions are planned in areas such as:

    • Eradicating poverty;
    • Food safety;
    • Agriculture;
    • Health;
    • Education;
    • Gender equality;
    • Reducing inequality;
    • Energy;
    • Water and sanitation;
    • Sustainable production and consumption standards;
    • Climate change;
    • Sustainable cities;
    • Protection and sustainable use of ocean and land ecosystems;
    • Inclusive economic growth;
    • Infrastructure, industrialization.
  • IDLocal (since 2013)

    The Local Development and Major Enterprises Initiative (IDLocal) aims to coordinate the business sector to reflect, share experiences, and build business proposals and guidelines for local development. It promotes dialogue, study, coordination, and the co-creation of proposals, methodologies, and local management tools. This is to encourage companies responsible for investments in the most vulnerable areas, in the form of large enterprises, to include local development in their business strategy. In 2014, Klabin developed a local empowerment and engagement project in Paraná, which joined actions, programs, and initiatives that generated positive impacts on the land and the communities.

  • National Pact for the Eradication of Slave Labor (since 2013)

    Launched in 2005, this pact brings together Brazilian and multinational companies that have committed to refusing to negotiate with those who exploit slave labor. In addition to economically restricting employers who commit this crime, the pact promotes decent work, social integration of workers in vulnerable situations, and fights coercion. Companies that are signatories of this initiative participate in the pact’s monitoring process and are committed to disclosing the results of their efforts to fight this practice.

  • Corporate Pact for Integrity and Against Corruption (since 2013)

    This Pact was launched in June 2006, an initiative of the Ethos Institute for Business and Social Responsibility, of UniEthos - Training and Development of Socially Responsible Management, of Patri Government Relations and Public Policy, the United Nations Development Programme (UNDP), the United Nations Office on Drugs and Crime (UNODC), and the Brazilian Committee of the Global Compact. The main commitments expressed in this text are: information about legislation; disclosure, guidance, and answers about legal principles concerning company activities; curbing bribery; transparent and lawful contributions to political campaigns; disseminating the principles of the Pact among stakeholders; open and transparent investigations; and taking action within the production chain.

Recognition

In addition to formal certifications, the excellence of Klabin’s processes, products, and results have been recognized by several awards granted by organizations, media outlets, partners, and communities. The following are awards and recognition that we received in 2015:

  • 2015 COMPANY OF VALUE – VALOR ECONÔMICO JOURNAL

    Klabin was chosen the 2015 Company of Value and the best in the pulp and paper industry, in the 15th edition of the Valor 1000 Yearbook, published by Valor Econômico journal. The choice depends upon approval by the Getulio Vargas Foundation and Serasa Experian, which evaluate a set of economic indicators and criteria for corporate governance, social engagement, and respect for consumers and the environment.

Members of Klabin's Executive Board and Board of Directors

  • EMPRESAS MAIS 2015 – O ESTADO DE S.PAULO NEWSPAPER

    Klabin was the winner in the Paper and Pulp category of the Empresas Mais Award promoted by the O Estado de S.Paulo newspaper, which publishes the Empresas Mais Yearbook. Selection follows methodology developed in partnership with the Administration Institute Foundation (FIA) in order to evaluate the performance of companies operating in Brazil.

  • 2015 EXAME YEARBOOK OF BEST & BIGGEST AWARD

    Klabin was featured in the Exame magazine awards, voted the best company of the year in agribusiness. The company was also recognized in two other categories: best company in the paper and pulp industry, and the best company in the wood and pulp industry. The yearbook evaluates companies in the economy’s 18 major industries.

  • WATER MANAGEMENT - EXAME SUSTAINABILITY GUIDE 2015

    Klabin received an outstanding award for Water Management in the Exame Sustainability Guide. The company was also listed among the most sustainable companies in Brazil by the Guide. The choice was made according to methodology developed by the Sustainability Studies Center of the Getulio Vargas Foundation in São Paulo (GVces).

  • MOST ADMIRED COMPANIES IN BRAZIL 2015 – CARTA CAPITAL MAGAZINE

    For the fourth consecutive year, Klabin was voted the most admired company in Brazil in the Paper and Pulp category, by Carta Capital magazine. The most admired companies are chosen by surveying a group of executives who evaluate and score companies from various sectors.

  • CFO OF THE YEAR 2015 – LATIN TRADE

    The Latin Trade Group chose Antonio Sergio Alfano, Klabin’s CFO and Director of Investor Relations, as Brazil CFO of the Year. Each year, the award recognizes financial executives whose conduct in finance stands out at the companies for which they work.

  • BEST IN AGRIBUSINESS 2015 – GLOBO RURAL MAGAZINE

    For the second year, Klabin was recognized for being the best company in the Reforestation, Pulp and Paper category, by Globo Rural magazine. Promoted in partnership with Serasa Experian, the 11th edition of the award presented a complete overview of the financial performance of major agribusiness companies.

  • THE BEST OF DINHEIRO RURAL 2015 – ISTOÉ DINHEIRO RURAL

    For the third consecutive year, Klabin ranked first in the Paper, Pulp, and Reforestation Industry. The company also came in first in two other categories: Best major indirect agribusiness company, and Best financial management of a major indirect agribusiness company. The award evaluated the financial data and management information of over 500 agribusiness companies.

  • 500 BEST IN THE SOUTH 2015 – AMANHÃ MAGAZINE

    For the third consecutive year, Klabin was highlighted in the Paper and Pulp sector in the Southern region. The company was also recognized for being the 3rd company on the Paraná regional ranking. In the overall standings, the company ranked 9th. The award was organized 25 years ago by Amanhã magazine in partnership with PwC Consulting.

  • HIGHLIGHT OF THE YEAR 2015 - COMMERCIAL ASSOCIATION OF RIO DE JANEIRO (ACRJ)

    Klabin was recognized as the Highlight of the Year by the ACRJ for its historic contribution to the country’s social, economic, and sustainable development, particularly by building the new plant in Ortigueira, Paraná.

  • JOSÉ PASCHOAL BAGGIO ENTREPRENEUR 2015 – CORREIO LAGEANO NEWSPAPER

    For the 17th consecutive year, Klabin won the José Paschoal Baggio Entrepreneur award. Created in 1999 by Correio Lageano newspaper, this recognition honors and appreciates companies that contribute to improving the social and economic conditions in the mountain region of the state of Santa Catarina. In this edition, the 50 companies with the best sales tax return (ICMS) in the region were awarded.

  • 2015 FLEXO QUALITY AWARD– BRAZILIAN TECHNICAL ASSOCIATION OF FLEXOGRAPHY

    Klabin won the Premium Supplier award in the substrates category from the Brazilian Technical Association of Flexography. In its 23rd edition, ABFLEXO/FTA-Brasil recognizes suppliers that contribute to the development of flexographic technology and digital conversion of Brazilian converters.

  • PARANÁ CLIMATE SEAL 2015 – GOLD CATEGORY

    Klabin received the Paraná Climate Seal in the Gold category, which recognizes companies that prepare and disclose their greenhouse gas emission inventory. The seal, issued by the State Department of the Environment and Water Resources, with the participation of the Paraná State Industries Federation (FIEP), is a public record of the voluntary memberships of companies operating in the state.

  • COMPANY OF THE YEAR 2015 – GESTÃO RH GROUP

    Klabin was voted company of the year for best practices in people management in Latin America by the Gestão RH Group. This choice was based on the ranking of the 500 Largest Companies in Latin America, by América Economía magazine, and research developed by the publishing house Gestão RH.

  • INDUSTRY HIGHLIGHTS 2015 – BRAZILIAN TECHNICAL ASSOCIATION OF PULP AND PAPER (ABTCP)

    Klabin won the 2015 Industry Highlights award from the Brazilian Technical Association of Pulp and Paper in the Human and Organizational Development, Social Responsibility, and Paper Packaging Manufacturer categories. In the latter category, the company was recognized for the seventh consecutive year. The ABTCP highlights the best companies in each segment of the Paper and Pulp industry.

  • COMPANIES WITH THE BEST COMMUNICATION WITH JOURNALISTS 2015 – NEGÓCIOS DA COMUNICAÇÃO MAGAZINE

    Klabin was awarded the Company with the Best Communication with Journalists in the Paper and Pulp category. Promoted by Negócios da Comunicação magazine, the award heard the opinions of 25,000 journalists, who had the opportunity to choose three of the best companies that maintain a good relationship with the press in each of the economic sectors listed in the survey.

  • SUL FOR EXPORT 2015 – AMANHÃ MAGAZINE

    Klabin was recognized by the Sul For Export award in the Largest Exporters and Largest in the Sector categories. The ranking awards the 90 largest exporters from the Southern region of Brazil. The company was highlighted in the Paper and Pulp sector and holds the 21st position in the overall ranking.

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Responsible management of natural resources and community relations

Sustainability is the essence of what we do. Conserving natural resources and minimizing impact on the environment and neighboring communities are prerequisites for Klabin’s growth and sustainability. These issues are so important to us that they are part of our Materiality in the form of two aspects that will be covered in this section:

Best practices in Sustainability

For Klabin, 2015 was a year of significant achievements, which resulted in the recognition of our efforts toward sustainability. For example, being highlighted by the Carbon Disclosure Project (CDP), the Environmental Performance Report of the Environmental Paper Company Index (EPCI) by the World Wildlife Fund (WWF) (learn more in the Excellence section), and our commitments to sustainability objectives and goals, including reducing greenhouse gas emissions (GHG), reducing water and energy consumption, and increasing the use of renewable sources in the company’s energy matrix.

The awards we received (read more in the Excellence section) and the concrete results of our commitments are tangible indicators of the importance of Sustainability for Klabin. Other signs show the beginning of a two-way global debate about sustainability at corporate level. Organizations like ours, which were founded and developed in an emerging country, show that they are capable of the same, or more advanced, practices as those existing in developed countries. Part of our effort is to constantly search the world for the best practices; but we have begun to notice that other companies, in other countries, now look at us with the same purpose.

Sustainability strategy

From the Materiality matrix, updated in 2014, we moved towards a Sustainability Strategy for Klabin. We are guided by our Vision and our Sustainability Policy, which are the basis for our operations under this aspect (learn more in the highlight below). Addressing this issue carefully and centrally in all of our activities is a long-term commitment we have made to our shareholders, clients, employees, suppliers, and neighboring communities.

This strategy must combine three main elements: the material aspects, a set of sustainability indicators, and the strategic objectives shared by the entire organization. These terms were defined in 2015 in partnership with a specialized consulting firm. Managers and employees from the business units and corporate departments were interviewed, and internal documents, benchmarks, and global industry references were analyzed. The result is summarized in the figure and table below. The figure shows Klabin’s resources in the spheres of governance and sustainability management, and the table shows the strategic objectives associated with each of the aspects in the company's Materiality Matrix.

Estratégia de sustentabilidade

Sustainable Vision

We believe that sustainability is an ongoing process of creating value, emphasizing the balance between the economic, social, and environmental spheres. We are a distinguished forest-based company with responsible management, committed to biodiversity. We work collaboratively with our customers and suppliers, always guided by innovation and the constant improvement of our products and processes. We promote the engagement and development of our personnel and the communities where we operate, aiming for growing, sustainable results for the entire value chain achieved in an integrated manner.

Sustainability Policy

  1. Seek competitive quality, aiming at sustainable improvement of its results, researching, developing and continuously improving processes, products and services, in place and new, to meet the expectations of clients, employees, shareholders, community, suppliers and other stakeholders.
  2. Foster collaboration with customers, suppliers, academia and other stakeholders in the search for innovation of products and processes, and for improvements to the value chain.
  3. Ensure appreciation of the forest base through its transformation into sustainable and competitive products.
  4. Sustainably ensure supply of planted wood for its industrial units without harming the associated natural ecosystems, in its own operations and in the operations of partner suppliers.
  5. Practice and promote recycling of pulp fiber recycling in its production chain.
  6. Avoid and prevent pollution by reducing environmental impacts related to water effluents, solid waste, and air emissions, constantly considering these elements in maintenance and improvement of production processes, in the development and improvement of products, in forestry and logistics operations, and in monitoring of critical suppliers in terms of economic and social and environmental aspects.
  7. Seek to apply the most efficient and up-to-date technologies and engineering solutions in the implementation of new projects and ventures, ensuring the protection of human health, natural resources and the environment.
  8. Promote personal and professional growth of its employees and the continuous improvement of work, health and safety conditions.
  9. Promote a culture to disseminate ethics and develop best practices in corporate governance.
  10. Observe the Sustainable Development Goals (SDG) of the United Nations and guide its actions and investments to strengthen this agenda, acting to promote a positive social and environmental development of the locations where the company operates.
  11. Practice social responsibility focused on neighboring communities according to the private social investment platform, based on lines of business: local development and education.
  12. Comply with the legislation and standards applicable to the product, the environment, health, and safety.
  13. Ensure that the company's operations constantly seek to reduce greenhouse gas emissions (GHG).
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Environment

Below are some of Klabin’s most important initiatives and achievements concerning care for the environment in 2015:

Objective 2014 Goal 2014 Result 2015 Goal 2015 Result 2016 Goal Medium term goal
(3 to 5 years)
Reduce greenhouse gas emissions1 205 kg CO2eq/t paper 219,36 kg CO2eq/t paper 225 kg CO2eq/t paper (Klabin S.A.) 210,46 kg CO2eq/t paper (Klabin S.A.) 210 (Klabin S.A.) 185 kg CO2eq/t paper (Klabin S.A.)
Reduce direct greenhouse gas emissions 0.5% compared to 2013 Reduced by 1% Reduced by 0.1% compared to2014 0.6% compared to 2014 0.2% compared to 2015
Reduce purchased energy2 918,826 MW-h/year Reduced by 1% compared to 2014 1,006,607.69 MW-h/year increased 10% Reduced by 1% compared to 2015 Reduced by 5%
Reduce water consumption3 62,719 m3/year x 1000 Reduced by 0.1% compared to 2014 Reduced by 1.18% compared to 2015 Reduced by 0.5% compared to 2015
Increase the use of renewable sources in the energy matrix 87% 84.6% 84% 83% 84% 88%
Increase selfsufficiency of energy generation 57% of needs 51.2% 52% 53% 45%
Goal was reduced due to the loss of generation from the Salto Mauá Small Hydroelectric Plant (end of the compensation period)
100% of needs

The Environmental Department participates in a Committee that bears the same name and is composed of the Board of Directors and representatives of the Paper, Packaging and Recycling businesses. The Committee defines the goals for energy, water, emissions, reusable waste, hazardous solid waste, recycling, among others. And based on these goals, other specific goals are defined for all company units. [G4-DMA]

Cleaner fuel

Two of our industrial units completed the conversion of their boilers to cleaner and more renewable energy sources. The unit in Itajaí, SC, began using a new gas-powered boiler to generate steam when producing corrugated cardboard. The change helps to make the company’s energy matrix cleaner, reducing the environmental impact. The unit Angatuba, SP, installed two boilers that use biomass to produce steam - in this case, using the plant waste from forestry operations. It is a renewable source that meets the two goals of benefiting the environment and lowering our energy costs.

For several years, we have been committed to switching fossil fuel for biomass as an energy source. We reduced fuel oil consumption in our industrial processes by 94,000 tons/year and 83% of our energy comes from renewable sources. We are close to the goal of using 88% renewable energy by 2019. Several sources contribute to this cleaner matrix: in addition to biomass, we burn black liquor (a by-product of the industrial process) and use our own hydroelectric electricity.

Our concern with the availability of abundant and clean energy extends to the recently built Puma Unit in Ortigueira, PR. This unit will make Klabin a self-sufficient organization when it comes to generating electricity, with the capacity to produce 270 MW. Of that amount, 120 MW will be used to supply the industrial operation and 150 MW will be available for marketing in the Brazilian Electric Power System – sufficient to supply a city of 500,000 inhabitants.

In 2015, Klabin consumed 37,793,687.70 GJ of energy, of which more than 82.93% came from renewable sources. Of this total, only 3,623,999.70 GJ were acquired from the national electrical system (consumption of purchased electricity). There was no reduction in the absolute consumption of energy for the year. [G4-EN3, EN6]

Consumption of fuel from non-renewable sources, by type of fuel (in GJ)
2015 2014
Natural gas 1,435,481 1,182,161
Fuel oil 4,077,194 3,445,957
LPG 316,632 297,019
Diesel – stationary engines 4,255 1,654
Total 5,833,562 4,926,791